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Bookkeeping   Systems 

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Retail    Lumber 


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PUBLISHED  BY 


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Introduction. 

The  articles  on  retail  lumber  bookkeeping  and  various  details  of  ofi&ce  system  for  the 
retail  lumber  yard  were  contributed  in  a  prize  contest  held  the  latter  part  of  1910,  and  the 
articles  and  forms  \^eve  published  in  the  American  Lumberman  during  1911.  Two 
articles  are  appended  which  were  not  contributed  in  this  contest,  but  were  prepared  by 
an  editorial  representative  of  the  AiiERiCAN  Lumberman  as  the  result  of  visits  to  the 
two  yards  whose  accounting  and  office  systems  are  discussed. 

No  particular  attempt  has  been  made  at  rearrangement  and  classification  of  subjects 
treated  in  these  articles,  but  a  subject  index  has  been  added  at  the  end  of  the  book  to  facil- 
itate convenient  reference  to  any  particular  subject. 

It  will  be  noted  that  a  great  variety  of  different  methods  are  represented  in  these 
articles,  not  all  of  which  can  be  the  best.  They  offer,  however,  a  variety  of  ideas  from  which 
the  reader  may  select  those  which  appear  best  to  fit  his  own  particular  circumstance 
or  meet  his  own  approval.  Many  of  the  con  tributors  do  not  keep  a  running  stock  record, 
but  a  number  of  others  do,  and  there  are  several  distinct  methods  shown  for  keeping 
track  of  this  matter  successfully. 

Since  the  publication  of  these  articles  there  has  been  considerable  demand  for  back 
copies  of  the  paper  containing  them,  and  it  is  believed  that  a  republication  of  this  matter 
in  a  more  convenient  form  will  meet  with  much  favor  upon  the  part  of  many  of  our  read- 
ers. Should  any  problem  come  up  which  does  not  appear  to  be  successfully  .covered 
here,  the  Query  and  Comment  Department  of  the  American  Lumberman  is  always  open 
to  inquiries  upon  such  subjects. 

Additional  copies  of  this  pamphlet  will  be  furnished  at  35  cents  each,  postpaid. 

AMEEICAN  LUMBERMAN, 

431  South  Dearborn  Street, 

Chicago,  111, 


258690 


PRIZE  BOOKKEEPING  SYSTEMS  IN  A  RETAIL  BUSINESS. 


B00EK£EFINO  IN  THI!  BETAH.  YASD. 

Xo  section,  no  state  lias  a  monopoly  of  the  men  in  the 
retail  lumber  business  who  are  seeking  advanced  methods 
in  their  occupation.  That  has  been  demonstrated  anew 
by  the  results  of  the  bookkeeping  contest  conducted  by 
the  American  Lumbekman  in  which  the  prize  winners 
are  this  week  announced.  Several  months  ago  this  publi- 
cation offered  a  series  of  rewards  for  the  best  letters  on 
this  subject.  The  response  was  almost  overwhelming,  so 
nearly  so  that  it  has  required  time  to  determine  the  best. 
Letters  came  from  every  state,  from  England,  from  Can- 
ada and  elsewhere;  and  this  week  the  Ameeican  Lum- 
BEEMAN  begins  the  presentation  of  the  best  thought  of 
the  best  thinkers  on  this  question. 

To  a  Canadian  goes  the  first  award,  and  the  others  are 
distributed  on  a  strict  system  of  point-scoring  to  dealers 
in  Pennsylvania,  Indiana,  Mississippi,  North  Dakota, 
Minnesota,  Colorado  and  Arkansas.  It  is  a  matter  of 
special  gratification  to  the  American  Lumberman  that 
the  contest  awakened  such  widespread  interest,  for  where 
one  wrote  hundreds  wiU  read ;  and  it  is  a  matter  of  grati- 
fication as  an  indication  of  the  universality  of  the  great 
audience  of  American  retailers  of  lumber  whom  it  is  the 
privilege  of  the  American  Lumberman  each  week  to 
address.  * 

Wherever  lives  a  retailer,  regardless  of  geographical 
location,  there  is  perplexity  over  the  question  of  book- 
keeping— a  desire  to  learn  new  and  better  methods  of 
keeping  a  record  of  all  classes  of  accounts.  Better  meth- 
ods do  not  mean  more  detailed  methods,  a  more  intricate 
system.  They  mean  accuracy,  but  economy  of  time  and 
labor.  They  mean  the  use  of  short  cuts  without  the  sacri- 
fice of  system,  the  use  of  system  without  the  loss  of 
short  cuts. 

Effort  has  been  made  to  judge  these  letters  not  from 
the  viewpoint  of  the  technical  bookkeeper  alone  but  from 
the  viewpoint  of  the  manager  who  employs  him,  or  him- 
self performs  the  work.  Xo  one  man  is  prepared  to 
furnish  a  complete  system  that  will  meet  all  these  re- 
quirements; but  from  the  experiences  and  ideas  of  three- 
score retailers  who  here  present  them  the  retailer  will  be 
able  to  evolve  a  bookkeeping  method  nearer  the  ideal.   He 


may  have  a  system  of  his  own  which  is  good  in  all  but 
one  particular.  The  reading  of  these  letters  from  prac- 
tical retailers,  as  they  appear  from  week  to  week,  may 
supply  the  missing  link. 

One  man's  system  may  be  strong  in  its  stock  record 
and  weak  somewhere  else;  another  man  may  have  a  way 
of  supplying  customers  with  statements  that  is  all  but 
ideal,  but  faulty  because  laborious;  but  out  of  the  ideas 
of  many  may  be  evolved  a  method  that  will  combine  the 
best  elements  of  aU. 

The  Ameeican  Lumberman  commends  these  letters  to 
its  retail  readers  and  urges  their  careful  examination  as 
they  appear  from  week  to  week;  and  it  promises  other 
features  of  a  correspondingly  helpful  character  in  later 


Announcement  of  the  Six  Prize  Winners 
— Two  Extra  Prizes  Awarded — Hon- 
orary List — Canada  and  England  Rep- 
resented —  First  Prize  Awarded  and 
Forms.  

In  December  the  American  Lumberman  offered  a  se- 
ries of  four  prizes  for  articles  on  retail  lumber  yard 
bookkeeping.  Fifty-nine  contributions  were  received  in 
this  contest,  all  of  which  were  carefully  considered.  Scor- 
ing of  comparative  completeness  and  merit  was  done 
on  the  following  basis: 

Points. 

Purchase    order    system 10 

Sales   Invoicing   and   delivery  order  system.. 18 

System  for  customers'   monthly  statements 10 

Sales    records 15 

Cash,    bank    and    Journal    records 15 

Ledger     forms 5 

Merchandise    classification 6 

Expense    classification 5 

Stock    record    and    inventory   system 15 

Record  for  estimates  and  partial  deliveries  thereon...     5 

Total     100 

3 


On  this  grading  the  prizes  have  been  awarded  as 
follows : 

Points. 
First   prize,   $20 — William   Patricks,   Fori;   Arthur, 

Ont 78 

Second  prize,  $15 — E.  J.  Lesher,  Pitcaim,  Pa 77 

Third  prize,   $10 — Gus.  H.  Tessman,  Terre  Haute, 

Ind 73 

Fourth  prize,  $5 — J.  B.  Hunt,  Collins,  Miss 69 

Tied  ^with  A.   K.    Orube,   Deapolis,   N.   D.,   extra 

prize,  $5 69 

S.  Shaw,  Dresden,  Ont.,  special  prize  for  a  superior 

stock  record  system,  $5 67 

Honorary  Mention. 

I.  G.  Iverson,  Houston,  Minn. 66 

Earl  P.  Haubert,  Philadelphia,  Pa 64 

M.  P.  Anthony,  Denver,  Colo 63 

O.  M.  Hendrickson,  Rochester,  Ind 60 

C.  E.  Hopkins,  Cotter,  Ark ; 60 

Archie  J.  Clarke,  Norwich,  England 59 

It  became  necessary  to  award  two  extra  prizes  of  $5 
each,  one  on  account  of  the  tie  for  fourth  prize,  and 
one  a  special  prize  for  a  stock  record  system  which  seems 
a  little  in  advance  of  anything  described  by  other  com- 
petitors, although  this  contributor  was  beaten  by  a  neck 
in  a  hot  finish  on  other  points  in  the  scoring. 

In  addition  to  the  honor  list  here  printed  there  are 
many  valuable  ideas  in  the  other  contributions,  all  of 
which  will  be  culled  and  presented  for  consideration 
in  due  course.  A  large  percentage  of  the  systems  sub- 
mitted were  adequate  as  to  accuracy  in  handling  the 
personal  accounts,  but  there  was  wide  variance  in  the 
amount  of  labor  required.  The  element  of  time  has 
been  considered  material  because  in  most  cases  it  is  es- 
sential that  the  books  require  as  little  labor  as  possible; 
and  it  was  for  this  reason  that  the  highest  scoring  was 
given  to  the  features  which  represent  the  greatest  saving 
of  labor,  in  handling  the  greater  number  of  items, 
such  as  invoicing,  monthly  statements  etc.  Theoretically 
the  questions  of  merchandise  classification  and  expense 
classification  should  have  been  given  higher  scores,  but 
these  were  held  down  because  of  a  desire  to  base  thci 


CHICAGO,  ILL, 

GOOD  SERVICE  LUMBER  CO. 

Ship   to  


-19- 


-Bailding . 


-Street 


MA  NUFA  CTURERS. 
WHOLESALE  AND  RETAIL  DEALERS 


LUMBER,    LATH,    SHINGLES, 
SASH  AND  DOORS 


INVOICE  TO 


AddresM  . 


Wanted 


~  form  1,  ny^xd,  with  tissue  duplicate  and  manila  tag  tripl  icate,  the  latter  coveriiig  left  side  of  form  only  and  used 

for  yard  order.     Duplicate  punched  for  post  binder. 

scoring  upon  high  average  practice  rather  than  upon 
an  ideal  which,  however  desirable,  has  not  yet  come  into 
common  use. 

The  one  contribution  from  England  is  interesting  as 
showing  methods  widely  used  by  retail  lumber  firms  there, 
and  scores  high  on  results,  but  rather  low  on  the  amount 
of  labor  required  by  the  system.  This  the  contributor 
wiU  doubtless  recognize  as  he  reads  the  other  articles  to 
be  published,  together  with  his  own,  which  we  are  glad 
to  have. 

In  connection  with  the  contributions  to  this  contest 
the  American  Lumberman  will  at  an  early  date  publish 
the  very  excellent  article  on  "Cost  System  for  a  Ketail 
Yard,"  delivered  by  William  A.  Jordan  at  the  annual 
convention  of  the  National  BuUders'  Supply  Associa- 
tion in  Chicago  on  February  22.  Mr.  Jordan  is  comp- 
troller and  auditor  of  the  Charles  Warner  Company,  Wil- 
mington, Del.,  dealer  in  cement  and  allied  building  mate- 
rial, and  the  paper  describes  its  method  of  classifying 
and  distributing  expenses  upon  various  merchandise  clas- 
sifications. The  system  is  directly  adaptable  to  lumber 
with  no  material  change,  and  the  paper  is  the  most 
valuable  contribution  to  bookkeeping  in  this  line  that 
ever  has  been  presented. 

The  first  prize  article  is  reprinted  herewith  and  others 
will  follow  in  both  the  prize  and  honor  classes,  with 
liberal  gleaning  of  the  best  ideas  from  all  the  articles. 


forming  a  series  which   doubtless  will  command  the  in- 
terested attention  of  all  our  retail  readers. 

FIEST  PBIZE  LETTER. 

Poet  Akthuh,  Ont.,  Dec.  12,  1910. 

Editors  American  Lumberman  :  I  take  pleasure  in  enclos- 
ing a  few  sample  sheets  of  a  system  of  bookkeeping  applicable 
to  a  retail  lumber  yard.  These  samples,  with  a  few  explana- 
tory words  I  shall  make,  will,  I  believe,  be  clear  to  you. 
You  win  note  this  covers  a  manufacturing  proposition  also, 
but  as  we  market  our  product  retail,  our  main  efforts  have 
been  clear,  comprehensive  records  for  the  retailer.  We 
could,  in  fact,  quit  manufacturing  and  still  make  no  change 
in  our  books.  Moreover,  this  system  Is  built  up  over  a 
period  of  years,  not  thrown  in  all  at  once.  Therefore  the 
facts  it  shows  are  practical  facts,  not  so  liable  to  be  red 
tape  facts. 

Taking  the  journal  and  cash  sheet,  it  will  be  seen  this  is 
merely  an  adaptation  of  the  old  synoptic  Idea  and  is  there- 
fore clear  to  everyone  in  principle.  Yon  can  make  subdivi- 
sion into  two,  three  or  four  ledgers,  Just  as  you  like,  and  by 
taking  advantage  of  the  idea  of  proving  your  ledgers  by 
footings  rather  than  balances  you  can  further  subdivide 
these  four  ledgers  again,  making  eight  sections  capable  of 
independent  proof.  This  method  shows  at  once  whether  an 
error  is  in  the  debit  or  credit  side  of  any  ledger,  thus  elimi- 
nating checking  the  opposite  debit  or  credit. 

The   expenses   are   "keyed"    for   different   classes,   and    the 


STATEMENT 

M 

CHICAGO. 

ILL,. 





ACCOUNT 
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GOOD  SERVICE  LUMBER  COMPANY 

WHOLESALE  AND  RETAIL  LUMBER 

DATE 

S.  S.   Nn, 

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LUMBER  OUTSIDE 

LUMBER   VARO  A 

LUMBEB  YARD   B           |{      AMOUNT  BUILDING  MATERIAL 

TOTAL 

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keys  carried  in  a  separate  book  or  register.  If  the  business 
is  small  this  classification  can  be  carried  on  the  face  of  the 
Journal  sheet,  mentioned  in  the  above  paragraph,  by  using 
a  column  for  each  class. 

All  orders  are  taken  in  the  office  and  entered  on  triplicate 
form  No.  1  for  shipment  and  invoicing.  This  Is  self-explana- 
tory. It  absolutely  prevents  material  leaving  the  yard,  as 
the  shipper  must  have  the  triplicate  form  before  he  can  even 
start  loading  a  load. 

After  extending  the  ofBce  copies  of  all  Invoices  for  the 
day  they  are  entered  on  form  3,  and  the  total  of  this  form 
for  the  day  charged  customers'  ledger  through  the  journal. 
Each  office  copy  is  then  posted  to  the  customer's  respective 
monthly  statement  sheet,  form  2,  the  total  of  which  sheet 
at  the  end  of  the  month  Is  entered  direct  to  his  account  in 
the  customers'  ledger.  The  value  of  this  Is  that  at  the 
end  of  the  month  you  have  a  statement  ready  to  mail  out, 
that  during  the  month  you  carry  the  mass  of  customers' 
business  by  single  entry,  but  have  all  the  safeguards  of 
double  entry. 


The  records  as  shown  on  form  3  (material  going  out)  With 
its  opposite,  form  4  (material  coming  in)  recapitulated  by 
months  shows  first ;  value  in  dollars  of  different  classes  of 
goods  handled,  also  value  per  unit.  For  instance,  it  permits 
of  comparison  between  hard  and  soft  woods,  which  it  pays 
to  push.  Second,  at  the  end  of  any  month  it  forms  a  per- 
petual inventory.  An  Inventory  taken  should  e^^l  the  dif- 
ference between  the  two  forms.  Being  loose  leaf,  can  be 
changed  at  pleasure  to  suit  one's  Ideas. 

The  ideas  mentioned  above  are  the  essential  ones  in  this 
system.  That  is,  a  subdivision  of  records  for  comparative 
purposes,  and  a  comparison  of  the  same  record  for  two, 
three  or  more  years  Is  the  only  comparison  that  is  true  and 
valuable.  Your  statement  at  the  end  of  the  year  will  show 
how  many  cents  gross  you  made  on  a  dollar's  worth  of  busi- 
ness In  pine  lumber,  as  compared  with  fir,  compared  with 
shingles  or  doors  or  lath.  If  this  Information  does  not 
cost  too  much,  it  Is  valuable.  It  also  shows  percentages  on 
cost,  but  these  figures  are  tricky  ;  you  can  not  rely  on  them 
for  next   year.     Your  statement   will  show  also   where  your 


expense  money  Is  going,  to  a  subdivision  as  fine  as  you  want 
to  make  it.  This  also  is  valuable  if  It  does  not  cost  too 
much. 

To  summarize  :  This  idea  Is  comprehensive  ;  it  shows  the 
gross  profits  and  what  lines  made  those  profits  and  what 
lines  lost  them.  The  money  you  spent  is  accounted  for,  and 
it  is  important  to  know  to  a  practical  point  where  your  ex- 
pense money  goes.  It  Is  comparative.  The  comparisons,  you 
can  get  here  are  limited  only  by  your  time  and  Industry. 
It  Is  elastic.  You  could  add  a  line  of  twenty  yards  and 
make  no  change  in  the  books  opened  in  your  original  invest- 
ment. You  could  curtail  operations  and  the  system  would 
adapt  Itself  to  the  curtailed  conditions.  And,  lastly,  it  Is 
Injxpenslve  to  operate,  considering  results.  It  Is  possible 
to  take  a  big  city  yard,  hire  all  the  bookwork  done  by  em- 
ployees, and  do  it  for  25  cents  a  thousand  sold.  Considering 
results,  that  Is  cheap.  William  Patricks, 

Accountant,  Vlgars-Shear  Lumber  Company,  Limited, 

Port  Arthur,  Ontarix). 

EDITORIAL   DISCUSSION. 

Mr.  Patricks'  very  excellent  article,  while  brief,  doubt- 
less will  be  completely  understood  by  reference  to  the 
cuts  reproducing  the  forms  submitted.  Form  No.  1  con- 
sists of  the  customer's  invoice,  reproducing  a  tissue  copy 
of  it  which  is  not  reproduced,  and  which  is  punched  for 
a  binder,  the  consecutive  invoice  number  being  numbered 
on  this  sheet  and  the  amount  being  carried  to  the  daily 
sales  sheet,  form  No.  3.  It  will  be  noted  that  the  uaily 
sales  sheet  contains  separate  columns  for  the  different 
classifications  of  merchandise  which  are  used  in  this  case, 
both  in  feet  and  in  amount.  A  similar  form  is  used  for 
material  received  as  a  purchase  sheet,  as  a  return  sheet 
and  as  a  stock  sheet,  being  form  No.  4.    A  separate  sheet 


PURCHASE   ) 

fEKIOD                                                                     ta 

RETURNS       j- SHEET 

"^"^      '                                           GOOD  SERVICE  LUMBER  COMPANY 

NO. 

NAME 

LUaSER 

FIR  1,  HARDWOOD  LUMBER 

lATH 

SHINGLES 

DOOR.  SASH,  ETC. 

FEET 

AMOUNT 

FEET 

AMOUNT 

PIECES 

AMOUNT 

PIECES 

AMOUNT 

DOOR 

WIND. 

PLASTF 

PAPER 

AMOUNT 

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Form  4,  twin  form  to  Form  3,  same  size,  yellow  paper;  note  slight  difference  in  column  arrangement. 

title  checked  to  indicate. 


Used  for  all  inmerchandise  of  three  Tcinds,  separate  sheets  for  each  with 


is  used  for  each  of  these  three  purposes.  These  sheets 
are  carried  to  a  monthly  and  to  a  yearly  recapitulation 
sheet,  and,  being  kept  by  quantity  as  well  as  amount, 
show  actual  quantities  in  their  respective  classes,  which 
quantities  should  agree  with  the  physical  inventory. 

Eeturning  to  the  customer's  invoice,  form  No.  1,  a 
triplicate  of  the  left  side  of  the  invoice  is  made  on 
manila  cardboard  as  a  yard  order.  In  filling  the  invoice 
in  the  first  place  only  the  order  columns  are  filled  and 
when  the  yard  order  comes  back,  if  any  items  of  the 
order  are  not  filled  or  not  fully  filled,  the  amount  act\ially 
delivered  is  extended  and  priced. 

The  contributor's  suggestion  as  to  the  subdivisions  of 
the  ledger  may  not  be  understood  by  some.  He  means 
by  this  that  the  ledger  may  be  divided  into  divisions 
corresponding  with  various  columns  upon  the  columnar 
journal.  Each  division  of  the  journal  should  prove  with 
its  column  when  fully  posted  and  if  any  error  appears  it 
is  confined  to  that  particular  section  and  does  not  need 
a  rechecking  of  the  entire  trial  balance.  He  further 
suggests  taking  the  balance  by  totals  and,  of  course, 
keeping- the  two  sides  of  the  journal  account  by  totals  in 
the  same  manner  instead  of  by  balances,  so  that  any  dis- 
crepancy will  indicate  whether  it  is  on  the  debit  or  credit 
side  and  not  necessitate  checking  both  sides.  It  is,  how- 
ever, much  more  work  to  foot  forward  in  this  manner 
and  possibly  more  work  than  would  be  required  to  check 
both  debits  and  credits  for  an  occasional  trial  balance 
error.     This  is  a  matter  of  individual  judgment. 

Form  2  shows  a  detailed  monthly  statement  to  cus- 
tomers. S.  S.  No.  here  means  sales  statement  number 
and  only  one  line  of  tho  monthly  statement  is  used  for 
each  sales  statement  or  invoice.  This  statement  is  de- 
signed for  taking  care  of  separate  accounts  for  two  or 
more  yards  in  the  same  set  of  statements.  For  the  pur- 
poses of  a  single  yard  the  same  thing  would  be  accom- 
plished with  the  use  of  but  three  columns,  one  for  lumber, 
one  for  building  material  and  one  for  a  total  of  these 
two. 


The  contributor  made  pencil  quotations  on  the  form 
which  have  been  erased  in  engraving  it  and  which  indicate 
that  these  monthly  statements  are  started  with  the  first 
monthly  charge  to  the  customer  and  that  after  the  total 
for  the  month 's  business  has  been  brought  down  the 
previous  month's  total  is  brought  to  the  statement  from 
the  ledger  and  any  credits  for  the  current  month  are  then 
deducted.  Although  this  is  not  fully  explained,  it  is 
probable  that  credits  for  material  returned  are  carried 
through  the  daily  material  return  sheet,  and  instead  of 
being  posted  direct  to  the  customer's  monthly  statement 
when  they  occur,  are  credited  to  his  ledger  account,  and 
that  the  total  of  such  credits  is  brought  from  the  ledger 
to  the  monthly  statement  at  the  end  of  the  month,  to- 
gether with  the  previous  month's  balance  and  together 
with  any  cash  which  has  been  paid  on  account. 

At  the  end  of  the  mon^h  as  described,  the  current 
'  month's  charges  are  posted  to  the  customer's  ledger  ac- 
count and  the  total  of  these  ledger  accounts  should  then 
balance  with  the  account  of  customers  on  the  journal. 

The  fo^i  showing  the  journal  headings  merely  shows 
their  arrangement  and  not  the  proper  width  apportion- 
ment of  the  columns.  It  shows  a  few  columns  which  have 
to  do  only  with  the  sawmill  business  and  which,  of  course, 
would  be  eliminated  in  bookkeeping  covering  only  lumber 
retailing.  The  daily  sales  are  brought  to  the  journal 
from  the  daily  sales  register  in  a  single  line  so  that  the 
journal  does  not  fill  up  rapidly.  It  would  also  be  ad- 
visable to  keep  a  separate  petty  cash  account,  carrying 
it  to  the  journal  by  a  single  line  entry  for  each  day,  for 
the  purpose  of  condensing  the  journalizing.  It  is  prob- 
able, although  Mr.  Patricks  does  not  describe  it,  that  a 
voucher  system  is  used  for  payments  and  that  the  sub- 
division of  expenses  is  made  from  the  voucher.  It  would 
have  been  interesting  had  Mr.  Patricks  fully  described 
this  particular  feature  and  given  his  entire  expense  classi- 
fication by  numbers. 

Taken  altogether  the  system  here  described  gives  the 
most  complete  results  with  a  minimum  of  labor.     Divid- 


ing the  merchandise  into  classes,  it  keeps  track  of  it  by 
classes  as  well  as  by  amounts,  thus  affording  material  for 
very  complete  periodical  statements,  showing  amount 
handled,  average  cost  price,  average  selling  price,  ex- 
penses properly  chargeable  to  each  class  etc.  It  also 
makes  it  possible  to  make  a  monthly  closing  of  accounts 
if  desired,  which  would  be  approximately  correct,  using 
for  this  purpose  such  quantities  as  are  shown  by  the 
stock  record  and  verifying  or  correcting  the  stock  record 
annually  or  semiannually  by  means  of  an  actual  inventory. 
The  best  bookkeeping  method  is  that  which  accom- 
plishes the  most  complete  results  in  the  simplest  manner, 
and  the  system  herein  described  deserves  earCful  study 
because  of  its  close  approach  to  the  ideal  in  these  re- 
spects. 

Second  Prize  Article  Printed  and  Re- 
viewed— Fine  Check  Voucher  System 
— Contract  Sales  Show  Masterly  Han- 
dling— Excellent  Stock  Record — Stock 
Summary  Includes  Contract  Sales  Un- 
delivered. 

SECOND  PRIZE  LETTER. 

riTC.\iitN,  Ta.,  January  7,  lUil. 
Editors  Amebicak  Lumberman  :  The  accurate  keeping  ol 
accounts  is  a  proposition  of  vital  Importance  to  every  upto- 
date  merchant.  Accurate  accounting  Increases  In  necessity 
and  Importance  In  propoitlon  as  the  merchant's  competition 
and  sources  of  loss  Increase  and  as  his  margins  of  profit  de- 
crease. An  accurate  accounting  system  eliminates  guess- 
work and  puts  the  merchant's  feet  upon  the  solid  rocls  of 
actual  fact.  He  knows  the  details  of  his  business,  knows 
exactly  where  he  stands,  and  just  what  his  limitations  are. 


1. 

MnisTTH  OF 

-.-19 

JOURNAL  CASH  BOOK  AND  MONTHLY  GENERAL  ACCOUNTS 

/ 

CtSTOMERS 

CREDITORS 

GENfflAL 
LfDGER 

LUMBER 
DR.                                  CR. 

BLDG.  MATtfilAL 
DR.                                Cfl, 

CASH 

BANK 

PAY  HOLl 

BILLS  PAY 

INTEREST 

BILLS  REC 

BRANCH  YDS. 

CAMPS  1-9 

EXPENSES 

EXPENSE 
ff[r.lSTEfl 

DATE 

HkUl 

TRANSACTIONS 

L.  F. 

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CR. 

OR. 

etc. 

DR. 

OR 

PCHS 

HETNS. 

DISCI 

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PCH5 

RETNS, 

DISCI. 

SALES 

OH. 

CR 

DR. 

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DR. 

CR. 

OR 

CR. 

OR. 

CR. 

DR. 

CR 

DR. 

CR. 

DR. 

CR. 

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17-J7 

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Form  5,  to  go  across  two   pages.      Column    widths   not  drawn  to  scale. 

6 


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i''t5.  1.     Sales  Journal.     Loose  leaf  13x17,  with  3  1-S-inch  loose  leaf  margin  at  left.     Three  merchandise  depart- 
ments, with  hlank  columns  for  additional  departments  if  desired.    Last  entry  summlirizes  Fig.  3. 


Recent  years  bave  seen  great  development  In  the  art  of 
systematizing,  and  in  many  instances  the  matter  has  been 
carried  to  the  extreme  iimit  with  the  result  that  the  business 
'has  been  overburdened  with  a  topheavy,  cumbersome  system 
of  accounting  that  really  retards  rather  tlian  facilitates  the 
dally  routine,  and  In  many  cases  Is  so  complicated  that  a 
Philadelphia  lawyer  could  not  unravel  it.  What  every 
retail  lumberman  needs  is  a  system  that  will  give  him  an 
accurate  accounting  of  his  business  In  detail,  and  which 
will  be  simple,  clearcut  and  devoid  of  useless  complicated 
maciiinory.  He  wants  a  system  that  is  inexpensive  iu  opera- 
tion. Our  system  is  the  result  of  several  years  of  evolution 
and  fills  the  bill  to  our  entire  satisfaction.  We  use  the 
double  entry  ledger  and  cashbooli.  It  is  assumed  that  all 
are  reasonably  familiar  with  the  double  entry  theory,  so  I 
take  no  time  to  discuss  that  feature.  Our  outfit  entire  con- 
sists of  duplicate  estimate  boolt,  triplicate  delivery-ticket 
machine,  daybook,  sales  Journal,  journal,  ledger.  ca:;hbook, 
vouchor  record  and  billing  stationery.  As  will  be  seen 
later,  our  entries  in  the  daybook.  Journal  and  cashbook  are 
comparulively  few,  consequently  the  books  do  not  fill  very 
rapidly  :  ud  these  volumes  are  of  the  standard-bound  type  ; 
on  the  other  hand,  the  sales  journal  and  ledger  fill  up  quite 
rapidly  and  therefore  we  use  these  in  the  ioosclcaf  form. 
A  loos'e  ieaf  ledger,  as  in  fact  any  other  loose  leaf  book, 
consist.^  of  two  volumes,  a  current  volume  and  a  transfer 
volume,  in  each  of  which  the  leaves  are  Indexed.  While  an 
account  is  active  It  Is  kept  In  the  current  binder,  each  ac- 
count having  a  full   page  of  Its  own.     When   the  account 


has  been  closed  it  is  withdrawn  from  the  current  ledger  and 
placed  In  tlie  transfer  volume.  If  the  account  la  subse- 
quently renewed  by  other  purchases,  the  page  is  returiied 
to  the  current  ledger.  Thus  the  loose  leaf  system  provides 
a  perpetnal  record  which  can  be  expanded  indefinitely. 

We  have  two  different  forms  of  sales  journal  sheets,  size 


16x10  inches,  one  for  the  current  sales  (Fig.  1)  and  one 
for  the  contract  sales  (Fig.  2).  By  contract  sales,  we  mean 
house  and  barn  bills  ets.,  those  sales  of  quantities  upon 
which    a   lump   price   has   been   made.  In   all    our   wagon 

deliveries  we  use  the  triplicate"  ticket.  Our  outfit  is  built 
with  a  receptacle,  under  lock  and  key,  which  holds  one  of 
the  triplicate  copies  of  each  entry  made.  The  other  two 
are  turned  out  of  tiie  machine  and  sent  with  the  teamster 
who  delivers  the  load.  The  teamster  presents  these  two 
tickets  to  the  customer,  one  of  which  lie — the  customer — : 
retains,  the  other  he  signs  as  a  receipt  for  the  stuff  and 
returns  the"  same  by  the  teamster  to  the  ollice,  where  It  Is 
filed  for  future  reference  if  needed.  The  bookkeeper  uses 
the  ticket  taken  from  the  Inside  of  the  machine  as  his  orig- 
inal entry.  From  these  tickets  he  posts  to  the  sales  jour- 
nal, as  indicated  in  E'ig.  1,  giving  ticket  number  in  each  case. 
These  tickets  are  then  filed  numerically  and  may  be  referred 
to  readily  at  any  time.  It  will  be  noticed  that  there  are 
several  columns  for  distribution  of  the  sales  on  the  sales  Journal 
sheet.  This  permits  of  extension  to  the  proper  department, 
and  at  the  end  of  the  month  the  addition  gives  not  only  the 
total  sales  for  the  month  but  the  sales  for  the  three  re- 
spective departments — lumber  and  mlliwork,  builders'  sup- 
plies and  hardware.  This  feature  may  be  elaborated  upon 
to  any  extent  desired. 

Handling  Contract  Sales. 

We  handle  each  contract  sale  or  house  bill  complete  as  a 
single  sale,  charging  It  up  In  the  sales  Journal  sheet  after 
all  deliveries  have  been  made.  When  a  customer  presents 
a  lumber  bill  for  figures,  we  copy  it  in  duplicate  in  the 
estimate  book  and  after  figuring  it  there  give  him  the  dupU- 


Lesher  Lumber  &  Supply  Co.,  Inc.                  No  ^53 

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Fig.  S.     Contract  sales  journal.     Size  same  as  Fig.  1,  loose-leaf.     Summary 

here  and  posted  to  Fig.  1. 

7 


'A"  is  produced  from  Fig.  3,  noted 


cate  copy  with  the  extensions  torn  off.  II  the  job  comes  our 
way,  this  bill  Is  Immediately  copied  upon  a  contract  sales 
sheet  as  illustrated  in  Fig.  2.  each  separate  job  being  given 
a  sheet  of  its  own.  As  deliveries  are  made  on  this  Job, 
the  quantities  are  entered  in  the  little  squares  as  shown  ; 
the  date  is  set  at  the  head  of  the  column  and  on  each  de- 
livery the  number  of  the  delivery  ticket  is  shown,  together 
with  the  quantity  of  each  partldar  item.  Thus  at  a 
glance  we  are  able  to  tell  Mr.  Smith  how  much  2x4 — 18's 
have  been  delivered,  or  any  other  detail  of  his  bill.  Any- 
thing that  is  not  Included  in  Mr.  Smith's  original  bill,  but 
which  is  furnished  on  this  job,  is  entered  in  the  "Extra 
list."  When  the  job  Is  finished,  we  use  statement  form 
Fig.  3  and  proceed  to  make  out  Mr.  Smith's  bill  in  dupli- 
cate, first  heading  the  list  with  the  original  estimated  price 
and  listing  below  it  all  items  on  the  original  estimate  on 
which  there  are  either  extras  or  credits.  After  this  the 
extras,  none  of  which  were  included  in  the  estimate,  are 
recorded  and  classified  and  the  statement  thus  made  up.  A 
comparison  of  Figs.  2  and  3  will  make  this  clear.  This  is 
then  summarized  and  totaled  on  contract  sheet  at  "A,"  Fig. 
2,  and  from  here  posted  to  the  regular  sales  sheet  upon 
that  date  as  shown  at  "B"  In  Fig.  1.  The  contract  sheet. 
Fig.  2,  Is  then  filed  in  the  transfer  journal  and  that  particu- 
lar case  is  out  of  the  way.  Small  sales  are  first  entered  in 
the  daybook  and  from  these  to  the  sales  journal  ;  this  Is 
done  merely  to  keep  the  sales  journal  In  neater  condition 
than    would    otherwise    be    possible. 

In  our  business  cash  sales  are  not  many  and   we  usually 


record  them  on  a  page  in  the  daybook  and  enter  in  the 
sales  journal  at  the  end  of  the  week.  Having  entered  the 
Smith  contract  sale  on  our  sales  sheet,  Fig.  1,  we  now  have 
a  fair  sample  of  the  entries  which  fill  up  the  current  sheets 
of  the  sales  Journal.  For  the  sake  of  illustration  we  will 
let  Fig.  1  represent  a  whole  month's  sales  transactions.  In 
ordinary  double  entry  bookkeeping  as  taught  In  the  schools, 
we  would  make  each  of  the  entries  in  a  Journal  and  from 
there  post  as   follows : 


Dr.    .1.    Smith .$19.32 

H.    M.    Kline 19.00 

Central    hotel    18.84 


Cr.  Mdse 119.32 

Cr.  Mdse 10.00 

Cr.  Mdse 18.84 


In  each  case  the  separate  debit  and  Its  respective  credit 
would  be  made.  We  economize  here  by  posting  our  debit 
entries  to  their  respective  places  dally ;  using  the  loose  leaf 
ledger,  our  folio  is  indicated  by  initial  letters  Instead  of 
page  number.  Our  credit  postings  are  not  made  until  the 
end  of  the  month,  when  we  get  our  totals.  In  this  case  our 
total  sales  amount  to  $337.24,  composed  of  lumber  and 
millwork  $426.45  ;  builders'  supplies  $88.52 ;  hardware 
$72.27.  The  sum  of  these  last  three  must  balance  the  total. 
We  now  turn  to  page  in  the  ledger  devoted  to  lumber  and 
millwork  sales  and  credit  "by  August  sales  $426.45."  Like- 
wise builders'  supplies  account  gets  $88.52  and  hardware 
$22.27.  All  our  Invoices  paid  are  likewise  debited  to  these 
respective  accounts  from  the  voucher  record  as  will  be  ex- 


plained later,  and  at  the  end  of  each  year  the  profit  on  each 
line  determined,  the  accounts  being  closed  into  the  merchan 
dlse  account  and  from  there  to  the  loss  and  gain  account. 

The  ■Voucher  Check  System. 

In  paying  our  bills  we  use  the  voucher  check  system.  As 
bills  and  invoices  are  received  they  are  filed  in  a  vertica' 
file  in  a  folder  labeled  "Invoices  pending."  When  the  stock 
arrives  and  is  checked  up  the  invoice  is  marked  O  K,  freight 
bill  is  attached,  and  any  correction  or  notation  is  mad? 
thereon,  and  If  any  adjustments  are  to  be  made  they  are 
attended  to,  and  when  satisfactory  the  invoice  with  all 
data  attached  is  passed  to  another  folder  labeled  "Bills 
and  Invoices  rayable."  When  payday  arrives  we  settle 
up,  using  the  voucher  check  form.  Fig.  4.  The  voucher  con- 
tains a  complete  record  of  each  transaction  and  Is  returned 
from  the  bank  and  filed  as  a  receipt.  The  vouchers  are 
made  up  In  book  form  similar  to  any  ordinary  check  book 
with  stub  for  keeping  bank  balance  straight.  The  vouchers 
are  entered  in  the  voucher  record.  Fig.  5,  and  extensions 
made  as  indicated  to  their  respective  departments.  As  will 
be  seen,  the  voucher  record  sheet  has  separate  columns  for 
each  class  of  expenditure.  As  we  separated  our  sales  Into 
three  departments^Iumber  and  millwork,  builders'  supplies 
and  hardware — we  likewise  keep  record  of  our  invoices  as 
pai(i.     Under  "chattels"  we  take  care  of  all  expenditures  for 


THREE  YARDS. 
Steond  S...  PilcAun.       B.!l  Pton«  U]  WiloKrdmj 
Brtuloo  Av«.,  Tr»(lOTd.    '■        ■■     WR2*     " 
V««ilk,  Ave.  VUL       •'        ■■     itL 


Lesher  Lumber  and  Suit»l" 


Io'mpany 


Fig.  3.    Customers  Final  Statement  on  Contract  Sale.    Size  10x17.    Quantities  taken 

from  Fig.  S,  priced  and  extended.    Below  the  break  the  items  are 

extras  and  should  he  in  the  second  or  Delivered  column. 


LESHER  LUMBER  «c  SUPPLY  CO.,  PITCAIRN,  PA.     Dr. 


JA3/ 


P.R.l.Q-' 


FOB  AMOUNT  OF  ACCOUNT 

AS  HEREON  TABULATED  OR 

ATTACHF.D 


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.     .  EXAIiflNED  AND  FOUND  CORftECTt 

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rN  RJU-  PAYMENT  OF  ABOVE  ACCOUHT 


^^^bolUrs  (S/^^^    ) 


<  SUPPLY  OL/ 


Fig.  4. 


Face  of  voucher  form.    Size  8x9  wide;  some  blank  lines  omitted  in 
engraving. 


anything  that  is  of  permanent  value,-  and  have  dissected 
our  expense  account  into  so  fiiany  parts  that  it  is  pretty 
hard  for  the  stray  nickels  and  dimes  to  escape  us.  An 
example  will  serve  to  show  how  this  performs  the  services 
of  a  "bulldog  on  the  woodpile."  Formerly  we  paid  our 
freight  and  demurrage  bills  all  In  one  and  let  it  go  at  that. 
In  1907  we  used  the  distribution  system  for  the  first  lime 
and  found  that  our  demurrage  for  that  year  amounted  to 
$87.  This  leak  having  been  revealed,  we  determined  to  plug 
It  up.  In  1908  our  expenses  in  this  direction  were  $5  ;  In 
1909,  $6  and  In  1910,  $3 ;  a  clean  saving  each  year  of  a 
month's  salary  for  a  good  man.  The  entries  on  the  voucher 
record  are  made  direct  from  the  voucher  before  the  latter  Is 
mailed  out.  A  comparison  of  Figs.  4  and  5  will  make  this 
clear.  At  the  end  of  the  month  the  sheet  Is  totaled  as 
showu  and  totals  entered  In  the  journal,  from  whence 
posted  to  cash  book  and  ledger  and  at  the  end  of  the  year 
the  Inventory  is  takSn  and  the  books  closed  in  the  usual 
manner.  At  the  end  of  each  month  a  trial  balance  Is  taken 
and  thus  each  month's  work  Is  proved  up. 

Our  stock  record  machinery  consists  of  stock  cards,  Fig. 
6,  weekly  sales  memo  sheets  and  stock  balance  sheets,  sec- 
tions of  which  are  shown  In  Figs.  7  and  8  respectively. 
Each  is  ruled  to  accommodate  420  different  Items  of  stock. 
The  slock  cards  are  ruled  as  shown  in  the  illustration. 
Each  specific  item  in  our  stock  is  given  its  individual  card. 
Cards  are  ruled  on  both  sides  and  when  these  are  full  the 
totals  are  carried  forward  on  a  new  one.  Reference  to 
Fix    fl   shows   that   on    .Tanuary    12.   1910,   we   had   In   stock 

VCTXaEE  REmjUB  SCHME  gDBJITOD  BY  7,  J,  HCSRTO. 


DATE 

191  .#. . 


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tiy.  6.     Top  of  stock  record  card  4x8  3-4,  one  used  for 
each  stock  item.      Filed  on  side,  but  reads  up- 
right.    Manila  tag  stock,  printed  both  sides. 


459  pieces  2x4—10  which  cost  us  $21  a  thousand:  on 
.lanuary  Hi  we  received  3(10  pieces  at  $21.50  ;  week  ending 
.lanuai-y  5  sold  flfty-slx  pieces  ;  January  8,  seventy-flve  pieces 
etc.  On  January  25,  striking  a  balance,  we  find  that  we 
have  received  759  pieces,  sold  330  pieces  and  h'ave  a  bal- 
ance of  429  pieces.  Thus  by  carrying  both  "stock  received" 
and  "stock  delivered  "  columns  forward  in  total,  at  the  end 
of  the  year  we  have  a  summary  of  receipts  and  sales  In 
terms  of  pieces  or  board  feet.  The  items  In  the  "stock  re- 
ceived" column  are  entered  from  the  invoices  as  soon  as  they 
are  O  K'd.  In  posting  each  day's  sales,  a  summary  of  the 
items  is  made  and  recorded  on  sheet  Fig.  7 ;  for  example, 
week  ended  February  19,  1010,  shows  that  on  Monday 
eleven  pieces  2x4 — 10  were  sold ;  on  Wednesday  twenty-one 
pieces;  on  Friday,  ten  pieces;  .and  on  Saturday,  twelve 
pieces,  making  a  total  for  the  week  of  flfty-four  pieces.  This 
total  Is  set  down  on  the  stock  card.  Fig.  6,  In  delivery  col- 
umn at  Its  respective  date  "X."  At  the  end  of  the  week 
sheet  7  is  filed  and  a  new  one  Is  started.  Fig.  8  shows  our 
"stock  balance"  sheet.  Using  this  form  on  the  1st  and 
15th  of  each  month,  we  go  through  our  contract  Journal 
and  list  In  column  2  all  stuff  contracted  for  which  has  not 
been  delivered.  Then  we  list  from  the  stock  cards.  In  col- 
umn 1  all  Items  on  hand.  Next  we  strike  our  balance  and 
can  tell  at  a  glance  whether  we  have  a  surplus  or  whether 
we  are  oversold  on  any  particular  Item,  namely :  Fig.  8 
shows  that  on  January  25  we  have  on  hand  429  pieces 
2x4 — 10  (taken  from  Fig.  6),  that  we  have  orders  for  116 
pieces  and  a  surplus  after  all  orders  have  been  delivered  of 


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Viy.  5.     Voucher  Register  or  Purchase  accord,  Distributing  Merchandise  and  Expenses  paid  through   bank.    Sketch  does  not  show  working  size.    Note  that  voucher  in  Fig.  4 

is  entered  here  near  the  bottom.     Totals  post  to  journal. 


313  pieces,  likewise  we  find  that  we  are  oversold  on  2x4 — 14 
to   the   extent   of  twenty-five   pieces. 

We  find  that  our  system  keeps  us  right  In  touch  with  the 
actual  condition  of  our  business,  meets  every  demand  put 
upon  it,  and  we  would  not  change  it  unless  by  so  doing  we 
could  better  it. 

Having  been  left  at  the  quarter-pole  on  a  previous  occa- 
sion when  competing  with  our  fellow  retai'.ers  In  a  similar 
contest,  we  know  we're  traveling  In  fast  company  and  after 
seeing  the  results  of  this  contest,  may  bo  obliged  to  do  some 
more    evoluting.  E.    J.    Lesher,    Secretary, 

Lesher  Lumber  &  Supply  Company. 

EDITORIAL  DISCUSSION. 

The  check  voucher  system  here  described  is  most  excel- 
lent and  deserves  careful  attention.  It  provides  a  good 
classification  of  expenses,  with  extra  columns  for  use  if 
needed,  one  of  which  already  has  been  added  for  ' '  Car 
Service"  or  demurrage,  as  referred  to  in  the  article. 
Merchandise  is  classified  in  three  departments,  and  all 
that  is  lacking  is  an  adequate  method  of  distributing  ex- 
penses upon  the  three  classes  of  merchandise.  This,  how- 
ever, no  main  set  of  books  can  do,  because  the  expense 
accounts  are  multiplied  by  the  merchandise  classifications, 
and  instead  of  fifteen  expense  accounts  as  here  shown 
forty-five  would  be  required.  Notes  Payable  column  if 
located  separately  from  the  expense  columns  would  make 
a  bptter  arrangement,  as  this  is  of  course  not  an  .expense 
but  a  liability.  The  footing  of  the  voucher  record  is 
entered  on  the  journal  in  a  single  entry  for  the  week  or 
month,  whatever  the  period  may  be. 

The  sales  journal.  Pig.  1,  is  of  customary  form  with 
extra  columns  to  provide  the  merchandise  classification. 
Where  cash  sales  are  an  important  feature  it  might  be 


No.  /  <^  3  ?: $ ''C/--?^. 

AdfcOUNTS  PAYABli 

LESHER  LUMBER  &  SUPPLY  CO.,  Dr. 

TO 

.  J&^^-<r^^r^■ ^s=>. 


Folio 


^^- 


DBTWBDTIOn 


■^^-^.  -(C^c^ 


/£./^^^ 


Fig.    ih.     Top  -of  left   hand  half   of   back  of  voucher. 

Bight  half  for  endorsements,  with  printed  legend, 

"Endorsed   and   receipted   as   payment   in 

full  for  account  as  herein  noted." 


well  to  provide  an  extra  column  here  for  cash  and  put 
cash  sales  here  instead  of  on  the  daybook  as  described, 
carrying  the  column  totals  only  to  the  eashbook,  thus 
h-aving  all  sales  together.  The  third  prize  article,  which 
will  be  published  next,  dcseribes  a  system  in  which  the 
consecutive  sales  ticket  duplicates  eonslitute  the  sales- 
book,  doing  away  entirely  with  the  labor  of  rewriting. 
The  contract  salesbook  is  a  strong  feature  of  this  sys- 
tem. The  contributions  describe  widely  different  methods 
of  handling  contract  or  estimate  sales.  Some  charge  the 
entire  price  up  at  once  before  delivery.  Others  charge 
each  load  at  full  price,  and  attempt  to  collect  full  price 
if  the  customer  docs  not  cany  out  his  contract  in  full; 
while  if  he  does,  the  last  loads  are  priced  at  a  reduction 
sufficient  to  make  the  total  charges  agree  with  the  esti- 
mate. Others  price  tlie  loads  at  pro  rata  of  the  estimate 
price.  This  system  appears  to  be  the  only  one  in  which 
the  entire  transaction  is  held  in  suspense  upon  a  separate 
record  until  completed,  and  then  put  upon  the  regular 
books  in  a  single  entry,  including  extras.  It  will  be  noted 
that  the  socalled  contract  .lournal  nas  no  money  eolumnsj 
nnd  keeps  track  only  of  quantities.  When  completed  the 
special  statement  form,  Fig.  3,  is  used  to  figure  up  on. 
The  estimate  items  and  over  and  under-deliveries  on  these 
items  are  first  figured,  then  the  extras,  grouped  into  de- 
partments. It  happenefi  that  in  the  example  given  the 
original  estimate  only  included  lumber.  Presumably  if 
hardware  and  building  supplies  had  been  included  these 
would  have  been  grouped  together  to  afford  a  convenient 
recapitulation.  In  the  lumber  extras  the  individual  items 
are  carried  direct  to  the  charge  column.  The  building 
supply  and  hardware  items  are  itemized  in  the  first  col- 
umns and  totals  carried  to  I  he  charge.  These  items 
theoretically  should  have  been  set  in  the  second   or  dc- 


?  fo 


Fig.  7.     One  corner  of  weeMy  stock  sheet  holding  iZO  items,  size  not  stated. 
Totals  post  to  stock  cards. 


Fig.  8. 
10 


Corner  of  periodical  stock  summary  sheet  as  described  in  text. 

stated. 


Size  of  sheet  not 


livery   column,   as   these   are   not   parts   of   the   originnl 
estimate. 

The  stock  record  system  described  shows  more  complete 
results  than  any  other  which  has  been  submitted,  in  that  it 
takes  into  account  material  sold  on  estimate  but  not  yet 
delivered.  It  uses  both  a  stock  sheet  and  stock  card,  the 
latter  for  the  ultimate  record.  The  stock  sheet  is  merely 
a  recapitulation  which  accumulates  the  week's  sales  for 
posting  to  each  stock  card  in  a  single  item.  This  looks 
like  extra  work,  and  in  other  systems  the  items  go  to  the 
stock  card  direct;  but  a  little  examination  of  Fig.  7  will 
show  that  items  can  be  placed  on  this  sheet  more  rapidly 
than  by  sorting  out  a  card,  entering  and  replacing  for 
each  item,  so  any  criticism  on  this  score  appears  to  have 
a  pretty  stout  string  tied  to  it.  The  rcsumary,  Fig.  8, 
however,  can  not  escape  such  criticism  so  easily.  The 
on-hand  balances  already  are  shown  on  the  stock  cards. 
By  providing  an  extra  column  they  could  take  the  state- 
ment of  "Obligated"  or  sold  for  future  delivery,  indi- 
cating at  once  the  few  cases  needing  attention  and  pur- 
chase; and  these  few  could  then  be  taken  off  in  a  very 
brief  statement  omitting  the  majority  of  items  which 
needed   no   particular  attention  at  that   time. 

The  contributor,  having  provided  special  books  for 
voucher  distribution  and  for  charge  sales,  covering  the 
.  great  majority  of  transactions,  is  content  to  use  daybook, 
cashbook  and  jourjial  of  commonplace  form  for  petty 
cash  and  the  few  transactions  which  require  journal 
entry;  making  these  first  on  a  daybook  (possibly  in 
pencil)  merely  to  contribute  to  neatness  of  the  journal. 
The  latter  presumably  is  2-column,  requiring  separate 
posting  for  each  item,  and  the  ledger  accounts  are  relied 
upon  to  accumulate  and  show  the  results  of  business.  It 
is  believetl,  however,  that  if  he  would  arrange  a  synoptic 
or  columnar  journal  in  such  manner  that  it  would  itself 
constitute  a  running  balance  sheet  of  the  business  it 
would  be  a  valuable  addition  to  the  system.  The  objec- 
tion to  a  multi-column  journal  occurs  where  it  is  used 
for  expanded  instead  of  condensed  entries,  filling  up 
fast  and  multiplying  the  work  of  totaling  columns  for- 
ward to  a  now  page.  Its  advantage,  in  addition  to  con- 
stantly showing  accumulated  operating  results,  is  that 
each  column  proves  against  its  corresponding,  portion  of 
the  ledger,  thus  sectionalizing  and  quickly  locating  any 
trial  balance  errors,  obviating  the  necessity  of  checking 
over  the  entire  trial  balance — that  most  despised  of  all 
bookkeeping  tasks. 

However,  while  the  contributor  received  a  low  score  on 
cash  and  journal  system,  his  method  of  handling  pur- 
chases and  disbursements,  stock  records,  expense  classi- 
fications and  the  difficulties  introduced  by  special  contract 
sales,  carried  him  easily  into  second  place,  and  these  fea- 
tures of  his  article  are  heartily  commended. 


Bookless  Bookkeeping — Salesbook  and 
Petty  Cashbook  Replaced  by  Ticket 
Systems — Monthly  Statements  Writ- 
ten Progressively — A  Clever  Synoptic 
Journal  Scheme. 


THIBD  PRIZE  LETTEE. 

Tekrb  Haute,  Inc.,  Nov.  21,  1910. — Editors  American 
LtiMEERMAX :  I  wish  to  enter  the  enclosed  forms  in  your 
bookkeeping  contest. 

We  use  no  books  with  this  set,  ctocpt  the  ledger  or 
ledgers ;  and  the  set  Is  made  up  of  the  order  and  loading 
ticket  as  per  Fig.  1 ;  the  triplicate  delivery  ticket  and  in- 
voice as  per  Fig.  2 ;  the  statement  and  ledger  as  per  Fig. 
3,   the   cash  ticket,   Fig.   4,  and   ledger. 

When  the  order  Is  received  it  Is  immediately  entered  upon 
the  loading  ticket  and  is  given  an  order  number,  and  all 
loading  Information  is  mentioned  thereon  and  at  the  end 
of  the  month  these  tickets  are  sorted  In  rotation  for  future 


Fig.  1.    loading  order.    Manila  tag,  4  3/4x7  long.    " X' 
marks  indicate  that  these  amounts  have  been  invoiced. 


reference  and  made  into  one  package  and  the  month  noted 
on   the  face. 

From  the  loading  ticket,  each  load  being  made  upon  a 
separate  delivery  ticket,  we  make  the  delivery  and  invoice 
tickets — ticket  No.  1  remains  in  the  office,  being  the  original 
copy,  and  is  used  to  make  the  charge  ;  ticket  No.  2  uors  tn 
the  customer  and  No.  3  is  signed  by  the  customer  aud  re- 
turned to  the  office,  where  it  Is  tiled  on  a  post  binder  ia 
number  rotation.  The  charges  from  No.  1  are  posted  in 
rotation  and  it  Is  also  filed  on  a  post  binder  and  if  not 
enough  to  fill  the  binder  for  one  month,  we  place  a  divider 
between  the  months  on  the  binder  and  mark  them  so  as 
to  show  on  the  side. 

These  loading  tickets  and  delivery  tickets  are  used  in 
single  orders  as  well  as  for  contracts,  as  we  charge  every- 
thing as  soon  as  it  is  delivered,  whether  by  contract  or 
otherwise. 

So  far  this  system  gives  everyone  an  Ihvolce  for  the 
amount  received,  and  we  find,  after  having  used  It  for  some 
time,  that  the  customers  save  their  invoices  and  use  them 
for  settlement  and  quite  frequently  the  amounts  are  paid 
upon  delivery  to  the  driver,  which  saves  the  book  work,  as 
those  paid  are  so  marked  upon  the  No.  1  ticket  and  no 
further  entry  is  made  of  them,  except  "cash  sale." 

We  now  open  the  statement  ledger  and  the  statements  are 
also  given  numbers  and  filed  on  the  post  binder  in  rotation. 
To  do  this  successfully  we  make  a  temporary  Index,  using 
heavy  paper  or  cardboard,  dividing  the  different  letters  in 
sections  large  enough  to  handle  the  month's  business,  as  we 
do  not  post  the  amounts  of  the  statement  ledger  until  the 
end  of  the  month,  at  which  time  the  amounts  are  totaled 
and  entered  In  the  ledger  as  a  total  under  the  last  date 
'n  which  material  was  bought  for  that  month.  In  the  event 
of  two  ledgers.  It  will  be  necessary  to  make  two  index 
sheets  (one  from  A  to  L  and  the  other  M  to  Z)  and  have 
the  statements  to  correspond.  The  statements  are  put  up 
fifty  to  a  pad  and  one  pad  will  be  numbered  in  duplicate 
throughout  and  used  for  the  first  ledger  and  the  other 
for  the  second,  as  In  this  manner  we  do  not  have  to  change 
ledgers  in  posting  but  will  post  all  the  accounts  in  pad  No. 
1  Into  ledger  A-L  and  pad  No.  2  in  ledger  M-Z.  After  the 
first  or  second  month,  one  will  become  familiar  with  the 
amount  of  business  done  and  will  only  number  In  advance 
about  the  amount  of  statements  required.  One  ledger  need 
not  be  treated  In  this  manner,  as  the  statements  can  be 
posted  as  they  are  entered  without  changing  ledgers. 

We  use  an  autograph  machine  for  invoices,  making  the 
tickets  in  triplicate  and  the  statements  are  made  in  dupli- 
cate, so  that  all  the  work  that  we  have  done  would  be 
necessary  in  any  kind  of  books,  but  we  have  furnished  our 
customer  with  an  Invoice  at  the  one  writing  and  at  the  end 
of  the  month  we  have  our  duplicate  statement  ready  to 
mail  or  send  out  with  the  collector  without  any  extra  work. 

We  use  the  looseleat  ledgers  and  recommend  them  above 
all  others  and  the  form  enclosed  is  the  one  used  after  sev- 


11 


eral  trials  of  different  stock  forms  ;  our  balances  are  carried 
out  after  each  transaction  so  that  we  have  no  footing  lines 
to  make  in  order  to  take  off  the  balances  for  trial  balance, 
and  one  is  less  liable  to  make  error  in  handling  one  trans- 
action than   several  during  the  month. 

Our  cash  system  is  very  simple.  We  use  an  autograph 
machine  that  makes  the  original  ticket,  duplicate,  and  the 
triplicate  copy  remains  in  the  machine — this  triplicate  copy 
rolls  on  a  spool  and  the  entries  are  spaced  about  three- 
fourths  of  an  inch  apart,  so  that  they  are  easily  added  and 
the  record  on  the  triplicate  is  that  part  shown  on  the  bot- 
tom of  the  sample.  The  right  hand  column  are  "Sales"  and 
the  next  to  the  left  Is  "Received  on  Account,"  and  the  one 
on  the  left  "Paid  Out."  The  other  columns  are  for  the 
ticket  numbers  and  the  operator's  initial. 

In  posting  to  the  Individual  accounts  we  use  the  duplicate 
ticket  (the  original  is  given  to  the  customer)  and  post  the 
amount  shown  and  also  place  the  amount  on  a  separate 
sheet  of  paper  in  order  to  see  that  the  amounts  posted  will 
equal  the  amount  shown  on  the  footing  of  the  triplicate 
sheet.  If  they  do  not,  we  find  the  reason  and  in  this  manner 
we  keep  a  check  on  each  day's  posting.  The  cash  tickets 
are  numbered  and  filed  in  rotation  and  are  the  only  cash 
book  used. 

In  posting  to  the  ledger  we  use  in  the  "folio''  column  by 


letter  and  number  instead  of  page  number,  for  example : 
When  posting  a  charge  we  place  the  letter  "S"  before  the 
statement  number,  indicating  "statement  No.,"  and  in 
posting  the  cash  ticket  we  place  the  letter  "C"  before  the 
number,  indicating  the  cash  ticket  number  and  these  can 
be  referred  to  quickly,  as  they  are  filed  in  rotation. 

The  ledger  shows  the  statement  number,  the  statement 
shows  the  ticket  number,  the  ticket  shows  the  order  num- 
ber and  the  order  will  show  the  full  information.  How- 
ever, It  is  very  seldom  that  we  have  to  go  farther  than 
the  ticket  (or  invoice).  In  this  manner  we  keep  the  ac- 
counts of  our  contractors  all  under  one  head,  but  the  state- 
ments show  the  different  "jobs''  and  are  entered  in  the 
ledger  accordingly.  Should  we  desire  to  trace  any  particular 
Job,  we  have  only  to  look  In  the  ledger  and  find  the  state- 
ment covering  that  Job  and  that  statement  will  show  every 
delivery  for  each  month.  We  find  that  the  contractors 
keep  their  Invoices  and  in  this  manner  they  keep  in  touch 
with  their  different  contracts  and  when  the  statements  are 
sent  at  the  end  of  the  month  they  are  checked  over  and 
settlements  are  made  much  more  Intelligently  than  under 
former  methods. 

When  the  month's  business  is  closed,  the  statements  are 
tooted  and  the  amounts  listed ;  this  will  show  the  total 
sales  on  account  and  will  be  added  to  the  individual  ledger 


balance  for  the  month  just  passed  and  from  this  amount 
we  subtract  the  total  amount  as  shown  under  cash  ticket 
"On  account"  for  the  month,  aud  the  balance  will  show 
the  total  of  the  Individual  ledger  (or  ledgers).  I  find  this 
method  a  great  labor  saver,  because,  after  having  posted 
the  statements  to  the  ledger  and  I  take  off  the  balances 
(which  are  already  carried  out)  and  they  agree  with  the 
amount  as  shown  In  the  foregoing,  then  I  am  certain  that 
my  ledger  is  correct  aud  trial  balance  worry  is  soou  over. 
However,  if  it  will  not  agree  we  know  where  the  trouble 
is  before  we  leave  it.  The  total  amount  of  the  statements 
is  credited  to  the  merchandise  account  and  this,  together 
with  the  total  of  the  cash  sales,  will  equal  the  total  sales 
for   the   month. 

In  connection  with  the  above,  I  use  a  combination  Jour- 
nal, cash-book  and  check  register.  This  is  a  multi-column 
book,  the  left  side  Dr.  and  the  right  Cr.,  and  on  each  side 
of  the  binding  is  the  blank  space  for  name  of  account 
charged  or  name  of  account  credited,  and  each  column  is 
headed  with  the  name  of  the  account,  namely,  debit  and 
credit  columns  for  lumber  account,  accounts  payable,  notes 
payable,  notes  receivable,  cash,  bank,  interest,  customers' 
ledger,  and  debit  column  for  expense  and  freight ;  we  also 
leave  one  or  two  blank  columns  for  Items  that  may  be  In- 
volved  later   and   the    names   can    be    written    at    the    head. 


1                                                                                                                                                                                                                                               STATISTICAL  JOURNAL,  CASH   BOOK   AND 
DEBIT 

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Fig.  5.    Journal  form  occupying  two  facing  pages,  each  about  18  inches  wide  by  any 


12 


Postings  are  made  as  follows :  Material  bought — Charge 
lumber  account  on  left  hand  page  and  credit  Accounts 
Payable  on  right  hand  page.  Money  borrowed  on  note — 
Notes  payable  credited  and  cash  or  bank  charged.  Note  re- 
ceived on  account — Notes  received  charged  and  customers' 
ledger  credited.  Cash — Cash  received  per  triplicate  in  ma- 
chine ;  cash  is  charged  with  footing  and  lumber  account 
credited  with  the  amount  of  sales  and  customers'  ledger 
with  amount  "on  account"  etc.  At  the  end  of  the  month 
enter  the  total  of  the  statements  to  the  debtor  account  of 
customers'  ledger  column  and  from  this  subtract  the  total 
shown  on  credit  side  of  the  same  account  and  the  balance 
will  give  you  what  your  Individual  ledgers  will"  total  and 
so  it  will  be  with  each  account  that  Is  carried  in  the  com- 
bination book.  This  Is  really  a  perpetual  trial  balance  and 
is  a  guide  for  all  the  separate  accounts  and  the  amounts 
shown  therein  (if  properly  entered)  and  will  be  the  basis 
for  the  individual  accounts  to  come  to  and  if  the  trial 
balance  is  "off"  we  have  only  to  look  into  the  combination 
journal  to  see  in  which  department  our  trouble  is. 

Regarding  stock  book,  I  have  had  considerable  experience 
and  have  yet  to  find  one  that  is  accurate,  or.  In  other 
words,  to  find  everyone  about  the  place  that  will  do  their 
part  In  keeping  an  accurate  account.  Quite  frequently 
our   billing   calls   for   a   certain   number   of   pieces  when   the 


order  Is  filled  "lineal  feet"  and  this,  together  with  cash 
sales  and  items  not  properly  recorded  and  other  changes 
and  corrections  made  by  the  loaders  will  throw  the  stock 
book  off.  The  one  that  pleases  me  better  than  any  other  is 
a  multi-column  book  (twenty  to  twenty-four  to  the  double 
page)  with  about  six  or  eight  cut  leaves  between  every  full 
page  and  the  items  listed  down  the  left  column,  and  each 
small  column  represented  the  sales  for  one  day  and  dated 
at  the  head  and  at  the  end  of  every  week  we  make  the 
additions  and  deductions  and  carry  the  balance  on  hand  Into 
the  seventh  column.  Sales'  are  entered  In  black  and  pur- 
chases In  red.  It  Is  optional  with  the  bookkeeper  whether 
the  Items  are  carried  in  feet  or  pieces.  The  book  can  be 
made  to  order  and  enough  cut  leaves  left  tg  handle  six 
months'  or  one  year's  business  without  transferring  the 
original  entry  at  the  left.  Gos  H.  Tessman, 

Bookkeeper  for  The  Reese-SnIder  Lumber  Company. 

In  a  separate  place  Mr.  Tessman  explains  the  journal 
further,  as  follows: 

This  book  at  first  glance  no  doubt  will  be  confusing  to 
one  not  accustomed  to  its  uses,  but  after  It  has  been  in- 
stalled and  in  good  running  order  we  would  not  part  with 
It ;  while  the  entries  are  made  across  the  page  they  are 
really  read  vertically  and  by  this  method  we  keep  the 
various  accounts  separate  and  "In  balance."     In  the  sample 


win  be  found  balances  at  the  head  of  the  different  columns 
carried  forward  and  the  debit  side  will  be  found  to  balance 
with  the  credit  side  of  the  journal.  At  the  end  of  the 
month  I  add  the  several  columns  and  In  the  ones  that  I 
do  not  post  to  the  ledger  accounts  I  simply  subtract  the 
smaller  from  the  greater  and  carry  the  balance  over  to  the 
beginning  of  the  next  month.  However,  during  the  posting 
of  the  current  month  I  add  the  columns,  and  If  the  sides 
balance  I  carry  the  totals  forward  until  the  end  of  the 
month  and  proceed  as  above. 

In  the  amount  shown  under  the  head  of  "General,"  on  the 
debit  side  will  be  carried  such  accounts  as  will  not  be 
handled  in  your  every  day'  transactions  and  in  this  case  It 
has  been  the  Idea  of  your  writer  to  make  this  account  up 
of  the  following  items  : . 

Oeneral  Dr. 

Notes    receivable    $  1,500.00 

Real  estate   5,000.00 

Buildings,    furniture,    wagons    etc 850.00 

Inventory     30,000.00 

Interest    and    discount 150.00 


$37,500.00 


CHECK   REGISTER   FOR  THE  MONTH 

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convenient  length,  fifty  lines  suggested.    Folio  114  would  refer  to  journal  page  1,  line  14. 

13 


General  Gt. 

CaUif al   ?25,000.00 

Merchandise    credit 


balance .-. . 

Notes   payabie  . . . . 
Undivided    profits  . 


13,425.00 
5,500.00 
4,000.00 


$47,925.00 

It  will  be  noted  that  I  have 
entered  the  totals  of  the  in- 
terest account  into  the  general 
account  from  the  preceding 
month  by  a  red  Ink  footing, 
which  closes  both  sides  of  this 
account  and  from  the  general 
account  it  is  entered  Into  the 
ledger  account  of  that  name. 
We  must  transfer  each  ac- 
count that  is  closed  at  the  end 
of  the  month  to  the  general 
account  first  and  post  from 
this  account,  as  it  is  the  idea 
to  have  the  journal  in  balance 
with  itself  and  make  the 
other  books  or  accounts 
"come  to  it."  The  same  thing, 
it  will  be  noted,  has  been  done 
with  the  merchandise  account. 
However,  this  procedure  is 
optional  with  the  bookkeeper, 
as  it  will  make  no  difference 
with  the  result  as  to  whether 
the  balance  is  transferred  to 
the  general  account  or 
whether  it  be  subtracted  at 
the  end  of  the  month  and  the 
balance  carried  forward  in  its  proper  column. 

In  entering  purchase  account,  the  freight  is  deducted 
(where  delivery  is  allowed)  and  the  net  balance  is  entered 
to  the  debtor  side,  and  the  accounts  payable  are  credited  as 
per  lines  1  and  2.  At.  the  end  of  the  month  we  add  the 
Freight  and  Purchase  account  together  and  the  footings  of 
the  two  will  make  the  total  to  be  charged  to  the  merchan- 
dise account.  Local  shipments  are  marked  "local"  where 
the  car  and  number  are  named.  The  expense  and  interest 
columns  are  self-explanatory.  Accounts  payable  must  be 
entered  the  amount  of  the  invoice  or  debt  that  was  placed 
on  the  credit  side  so  that  the  exact  amount  shown  will  be 
the  proper  balance  in  Accounts  I'ayable.  If  interest  be 
added  to  the  invoice  for  past  time,  it  will  be  entered  into 
the  column  under  that  head  and  discount  will  be  treated 
as  shown  on  line  11.  Cash  will  be  handled  as  per  previous 
explanation,  or  a  cashbook  may  be  opened  with  three  col- 
umns on  each  side  of  the  page  and  each  column  will  repre- 
sent receipts  or  expenditures  and   the  total   will  be  charged 


Fig.  2.    Sales  ticket,  triplicate.    Size  7 1/4x9  wide,  including  post  binder  margin  on 
first  and  third  tickets.    Holes  punched  for  hinder  do  not  show  in  cut. 

to  cash  and  the  credit  side  of  the  journal  will  be  entered 
the  separate  amount  for  which  it  is  intended.  In  the  event 
that  a  cash  book  is  used  in  place  of  the  cash  tickets,  the 
posting  "Received  on  Account"  will  be  posted  to  the  cus- 
tomers' ledger  direct  from  the  cashbook  and  the  total  post- 
ings will  be  checked  from  the  entry  as  shown  on  line  7. 

We  find  after  the  several  postings  into  the  journal  that 
the  additions  of  the  several  columns  will  balance  and  the 
footings  will  amount  to  $64,275.50.  If  it  does  not  balance 
we  must  find  it  before  we  can  carry  the  amounts  forward  to 
the  next  page  and  in  this  manner  we  keep  ourselves  In 
check.  In  taking  oft  the  trial  balance  our  journal  Is  the 
guide,  as  it  will  show  what  the  trial  balance  must  be,  and 
we  bring  the  different  amounts  to  the  amounts  shown  In 
the  footings.  Referring  back  to  the  statements  at  the  end  of  the 
month  we  total  the  amount  of  each  statement  and  the  total 
of  the  footings  thus  found  will  be  entered  as  a  whole  to  the 
customers'  ledger  on  the  debtor  side  as  shown  on  line  14, 
and  the  sales  column  will  be  credited  with  the  same  amount. 


At  the  end  of  the  month  we  add  the  debit  side  of  cus^tomers' 

ledger  and  from  it  subtract  the  credit  side  (from  entries 
made  as  explained)  and  the  balance  shows  what  the  foot- 
ings of  the  ledger  must  be,  so  that  in  this  manner  we  know 
what  the  trial  balance  is  before  we  take  it,  only  that  we 
make  the  accounts  "come  to"  the  amounts  shown  in  the 
register  and  by  this  method  we  know  in  just  what  depart- 
ment our  balance  is  off,  if  such  be  the  case. 

In  making  deposits  in  the  bank,  I  make  a  carbon  copy 
of  the  amounts  and  on  this  copy,  that  I  retain,  I  make 
memorandum  of  what  the  Items  are,  and  the  checks  will 
sho^  "by  whom  made"  and  "from  whom  received,"  so  that 
I   can  refer  back  to  the  date  for  information. 

DISCUSSION. 

The  ledger  page  submitted  is  not  reproduced,  as  it  is  a 
familiar  form,  in  which  the  narrow  explanation  column 
is  followed  bj'  the  folio  column  and  three  money  coli'.rans, 
the  first  for  debits,  second  for  credits  and  third  for 
balance.  Sometimes  ne.\t  the  balance  column  a  narrow 
column  is  allowed  in  which  to  indicate  whether  the  bal- 
ance is  debtor  or  creditor.  This  is  not  shown  on  the 
form  submitted,  and  is  unnecessary  as  credit  balances 
may  be  indicated  by  a  star  or  by  underlining.  The 
explanation  column  is  very  narrow,  as  no  explanations 
are  used  or  only  brief  ones,  such  as  "C"  for  cash,  "Al" 
for  allowances  etc.  The  rulings  therefore  occupy  only 
lialf  the  width  of  the  page  and  are  repeated  for  the 
second  half,  into  which  the  account  is  forwarded  when 
the  first  half  is  filled. 

The  methods  of  handling  s.iles  tickets  and  cash  tickets 
is  unique  and  deserves  careful  attention.  A  triplicate 
plain  roll  in  the  cash  machine  summarizes  the  tickets 
issued  in  a  single  line  for  each  transaction,  convenient 
for  adding.  The  contributor  implies  that  the  sales  tickets 
are  totaled  forward  in  a  similar  manner  which  he  does 
not  fully  describe,  but  which  might  well  be  accomplished 
in  the  same  manner  as  with  cash,  by  a  fourth  or  summary 
roll  separating  cash  from  charge  sales. 

The  contributor  refers  to  his  collection  of  current 
month's  statements,  with  their  duplicatei  interleaved, 
alphabetically  arranged,  as  a  "statement  journal."  This 
has  been  edited  to  read  "statement  ledger,"  as  it  is 
usually  so  known  and  is  really  a  ledger  of  current 
accounts,  carrying  the  charges  until  they  are  trans- 
ferred to  the  regular  account  at  the  end  of  the  month. 
Mr.  Tessman  probably  will  recognize  that  an  imjirove- 
ment  could  be  made  here  by  the  use  of  a  special  "cus- 
tomers' ledger"  in  which  the  left-hand  page  would  be 
the  regular  standing  ledger  account  of  the  customer, 
and  the  right-liand  page  would  be  his  current  monthly 
statement  with  its  duplicate  beneath  it,  ready  to  re- 
ceive the  daily  postings.  This,  of  course,  would  be 
loose  leaf,  new  statement  blanks  inserted  monthly, 
and  old  statement  duplicates  held  in  it  till  settled  and 


14 


then  transferred,  and  would  have  a  permanent  alpha- 
betical index,  like  any  loose  leaf  ledger. 

The  method  of  handling  deliveries  on  contract  sales 
is  suggested  but  not  fully  described,  and  is  not  so  com- 
plete as  that  described  by  Mr.  Lesher  in  the  last 
article.  In  the  present  instance  deliveries  are  invoiced 
as  they  occur,  while  Mr.  Lesher  accumulated  the  in- 
formation on  the  page  in  the  special  loose  leaf  contract 
journal,  until  deliveries  were  completed,  and  then  made 
one  statement  and  charge  entry  covering  the  entire  job. 
Whichever   way   is   adopted   is  a   matter   of  preference. 

The  columnar  journal  plan  here  presented  is  fairly 
well  worked*  out,  and  while  as  the  contributor  says  it 
is  not  readily  comprehended  at  first  glance  he  is  at 
considerable  pains  thoroughly  to  explain  its  uses.  It  is 
chieflj'  an  intermediate  book  between  the  original 
entry  records  and  the  ledger,  taking  cash  and  sales 
transactions  in  condensed  form  and  cari'ying  these 
entries  as  a  checking  balance  against  the  postings  from 
original  tickets,  while  as  to  other  transactions  it  is 
a  book  of  original  entry.  He  indicates  the  great  ad- 
vantage of  such  a  journal  in  sectionalizing  the  ledger. 
Each  column  controls  its  own  ledger  account  or  set 
of  accounts  and  shows  or  should  show  the  same  bal- 
ance. Any  difference  is  to  be  hunted  for  only  in  that 
section  of  the  accounts  instead  of  looking  through  the 
whole  trial  balance.  The  reviewer  prefers  the  journal 
form  in  which  each  account  has  its  own  pair  of  col 
timns,  Dt.  and  Cr.,  located  together,  instead  of  being 
separated  to  the  right  and  left  sides  of  the  facing 
pages.  This  is  a  stock  form,  and  the  columns  of  Mr. 
Tessman's  form  may  be  provided  for,  or  any  number 
of  columns  greater  or  lesser. 

Mr.  Tessman  recommends  for  a  stock  record  the 
line-ledger  form  in  which  each  item  is  carried  forward 
on  its  own  line  through  successive  short  pages,  so  that 
one  writing  of  the  stock  items  will  carry  for  a  long 
time.  This  is  a  good  arrangement  but  not  so  flexible 
as  the  card  system,  a  separate  card  for  each  item, 
which  Mr.  Lesher  has  already  described,  and  the  most 
complete  development  of  which  will  soon  be  published 
in  one  of  the  many  valuable  contributions  yet  to  aj'- 
pear. 

The  work  of  charging  and  billing,  and  the  handling 
of  petty  cash,  constitutes  by  far  the  largest  volume  of 
the  transactions  in  almost  any  lumber  yard,  and  Mr. 
Tessman  appears  to  accomplish  it  very  successfully 
with  the  least  amount  of  labor  of  any  plan  submitted, 
and  it  is  the  strong  feature  of  his  contribution.  Just 
how  it  would  add  anything  whatever  to  his  records  to 
go  to  work  and  write  up  all  these  transactions  in  a 
sales  journal,  post  to  accounts  by  items  and  then  make 
the  monthly  statement  from  the  ledger  account  at  the 
end  of  the  month  (instead  of  posting  direct  from  sales 
ticket  to  statement  as  he  describes)    is  not  apparent; 


and  if  the  work  accomplishes  no  useful  result,' why  is 
it  being  done  every  day  in  hundreds  of  lumber  yards 
throughout  the  country? 


^.  /    - 


MowTHtv  ytATngwr 


•w.;  The  Reese-5nider  Lumber  G). 


539  NORTH  SEVENTH  STREET 


Tig.  S.     lop  of  monthly  statement,  size  7  1/Sx8  112.   Ex- 
planation left  blank  except  in  special  instances, 
such  as  footings  and  credits. 

CASH  IKAINSACTION  WITH 

The  Heese-Snider  Lumber  Co* 


DEALBRS^ 


Uumber  and  Building   Material 

4  -t   ^  a  t\   ^39  N.  Seventh  Street 

/O       /»    Terre  Haute.  InH  'yZ<nj  It  iq/Q 


--fh  (B^  dlLjr 


*rn 


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II  Onr  Draliii«a  Pleaae  You.   Tell  Yonr  Frirndu:    if  >•«,  Tell  Da. 

Paid  0>1 

M«nb«r 

0|>«ral«>r 

On  Aceonnt 

CukS>l« 

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1  .^—^ 

t'ig.  4.    Cash  ticlet,  3x4  long.    Issued  from  machine,  ivith 

summary    roll    taking    only    the    bottom    entries    in 

three-fourths  inch  spacing  for  totaling  in 

three  separate  classifications, 

15 


Good  Brief  Classification  of  Accounts — 
Tissue  Ticket  Duplicated  Pasted  Into 
Salesbook — Invoices  Made  and  Mailed 
After  Orders  Are  Filled — Books  Closed 
Monthly — Card  Index  Stock  -Record. 


FOURTH  PEIZE  LETTER. 

Collins,  Miss.,  Jan.  12,  1911. — Editors  American  Lum- 
berman ;  Bookkeeping  can  be  briefly  defined  as  the  art  of 
recording  business  transactions  in  the  terms  of  money  and 
showing  the  results  obtained  therefrom.  If  the  results 
shown  are  to  be  accurate  it  is  absolutely  necessary  to 
record  all  the  transactions.  In  conducting  a  retail  yard 
all  the  transactions  must  be  gotten  into  the  record  before 
the  results  shown  can  be  relied  on  as  accurate. 

The  expenditures  in  connection  with  conducting  such  a 
business,  outside  of  the  purchase  of  the  stock  in  trade,  can 
be  classed  under  two  heads — permanent  [Investment]  and 
operating  expense.  Under  the  former  should  be  included  real 
estate,  buildings,  machinery,  oflice  equipment,  horses  and 
wagons,  in  tact  all  permanent  property.  All  other  expenditure 
■is  to  be  classed  under  operating  expense.  All  property  should 
be  represented  by  corresponding  accounts  on  the  ledger.  Noth- 
ing should  be  charged  to  these  accounts  except  property  or 
equipment  purchased  or  permanent  improvements  made.  All 
repairs  and  upkeep  are  a  proper  charge  to  operating  expense. 
l'"or  purposes  of  analysis  it  is  better  to  keep  various  expense 
accounts,  the  number  depending  entirely  on  the  size  of  the 
business  or  the  choice  or  reference  of  the  individual. 

Under  the  following  general  heads  can  be  grouped  all  the 
expense  :  Repairs  and  maintenance,  depreciation,  labor,  offlce 
expense  and  salaries,  general  expense,  insurance,  taxes,  rent, 
interest  and  discount.  Of  course,  many  of  these  can  be  fur- 
ther subdivided  if  desired.  An  account  should  be  kept  for 
the  stock  in  trade,  perhaps  several,  depending  on  the  number 
of  side  lines  carried.  One  of  these  should  be  headed  lumber 
and  one  or  more  for  coal,  cement,  paint  or  whatever  else  is 
sold. 

The  simplest  cash  book  to  keep  is  a  columnar  combination 
cash  book  and  Journal.  One  as  shown  in  Fig.  1  will  serve 
for  the  purpose  of  illustration. 

Items  for  which  columns  are  not  provided  must  be  en- 
tered in  the  sundries  columns  and  posted  direct  to  their 
respective  accounts.  Footings  of  the  several  columns  are 
carried  forward  until  the  end  of  the  month  and  the  totals 
posted.  Of  course,  all  the  separate  items  in  the  sundries 
columns  must  be  posted.  This  book  is  also  used  for  the 
recording  and  distribution  of  all  invoices  rendered  the 
concern  as  well  as  for  the  regular  journal  entries.  Where 
the  size  of  the  business  warrants,  of  course,  a  regular  pur- 
chase   invoice   book   could    be   kept.      This   cashbook   Is   self- 


balancing  and  all  entries  are  posted- to  the  same  side  of  the 
ledger   account,   which   makes   for   simplicity. 

A    petty    eashbook    should    be    kept    in    which    should    be 
entered  all  receipts  from  cash   sales  and  all  petty  expendi- 
tures from  day  to  day.     These  are  totaled  at  the  end  of  the  . 
month    and    transferred    to    the    large    eashbook    as    shown 
above. 

Provide  a  triplicate  ticket  machine.  Make  out  a  ticket 
for  all  material  leaving  the  yard ;  this  includes  all  local 
cash  values  as  well  as  material  going  out  by  team.  The 
original  and  second  copies  go  with  the  driver,  the  original 
to  be  signed  by  the  customer  and  returned  to  the  office, 
the  second  copy  to  be  retained  by  the  customer.  At  the  end 
of  the  day  the  roll  of  third  copies  are  removed  from  the 
machine,  clipped  apart,  and  pasted  in  order  in  the  sales 
book,  priced  and  extended.  Of  course,  this  last  can  be  done 
either  before  or  after  the  tickets  are  put  in  the  book.  In- 
voices are  made  out  direct  from  these  tickets.  The  signed 
ticket  which  comes  back  is  filed  under  the  customer's  name. 
The  salesbook  should  be  ruled  with  two  or  more  money 
columns  to  the  right.  First  should  be  headed  Lumber, 
second  Cash  Sales,  and  the  third  or  others  Coal,  Lime, 
Cement  or  other  merchandise.  Total  amount  of  the  charge 
lumber  sales  of  each  ticket  should  be  entered  in  the  lumber 
column,  all  cash  sales  in  the  second  and  the  charge  sales  of 
other  merchandise  in  the  third.  The  totals  of  the  charge 
columns  are  posted  at  the  end  of  the  month  to  the  credit 
side  of  the  proper  account  in  the  ledger  while  the  Individual 
accounts  are  debited.  The  cash  sales  column  is  not  posted, 
as  this  total  is  taken  care  of  through  the  petty  cash.  If 
cash  sales   Is  for  coal  or  lumber  it  should  be  so   Indicated 


when  the  entry  is  made  in  the  petty  cash  as  shown  above. 

At  the  end  of  the  month  the  total  of  these  two  should 
equal  the  total  of  the  cash  sales  column  in  the  sales  book. 
Of  course  the  petty  cash  sales  totals  should  be  posted  to 
the  lumber  and  coal  accounts  respectively. 

All  house  bills  or  contracts  are  handled  as  follows  :  For 
each  contract  open  ,a  special  ledger  account  with  the  pur- 
chaser and  give  it  a  number  or  name.  All  tickets  for  de- 
liveries to  this  job  are  extended  in  the  sales  Irook  at  about 
the  price  figured  in  the  estimate  and  are  posted  to  this 
special  account  in  the  ledger.  When  It  comes  toward  the 
finish  of  the  Job  it  must  bo  seen  that  the  final  delivery  is 
sufliciently  priced  to  equal  the  amount  of  the  contract  ex- 
actly. All  money  received  from  the  customer  applying  on 
this  contract  should  be  credited  to  him  on  this  account. 
Then  when  the  account  is  settled  in  full  the  sheet  is  bal- 
anced and  transferred  to  the  closed  accounts.  The  looseleaf 
ledger  will  be  found  to  be  far  the  most  convenient,  once  a 
man  has  become  accustomed  to  it.  For  all  contracts,  too,  a 
folder  should  be  opened  in  the  letter  file  and  all  papers 
pertaining  to  it  filed  there.  When  the  Job  is  finished  the 
folder  Is  transferred.  Under  this  system  there  is  little 
trouble  in  keeping  exact  tabs  on  the  status  of  each  of  the 
various  contracts. 

The  dealer  who  is  not  satisfied  with  taking  an  inventory 
only  once  a  year  and  who  desires  to  be  accurately  posted 
at  all  times  on  the  amount  of  stock  on  hand  can  do  so 
readily  by  keeping  a  card  file  Inventory.  A  card  should 
be  given  to  one  or  more  items  and  all  receipts  and  sales 
recorded  thereon.  These  should  be  ruled  off  at  the  end 
of  each  month  and  the  balance  brought  forward.     It  takes 


time  and  pains  to  keep  up  such  a  record  but  the  many 
benefits  derived  from  having  this  information  on  tap  at  all 
times  will  amply  repay  the  additional  effort  or  expense. 
Where  such  records  are  kept  accurately  It  permits  of  the 
books  being  closed  each  month  and  there  Is  not  the  uncer- 
tainty attendant  upon  going  a  whole  year  without  knowing 
accurately  how  the  business  stands.  Fig.  2  will  serve  as  an 
Illustration  of  how  the  continuous  inventory  may  be  kept. 

At  the  end  of  the  month  it  must  be  seen  before  closing 
the  cash  book  that  all  Invoices  rendered  the  concern  are 
entered  and  that  all  salaries  are  properly  credited.  The 
proprietor  or  proprietors  should  also  credit  their  accounts 
with  a  reasonable  salary.  Further  It  might  not  be  a  bad 
idea  for  the  proprietor  to  credit  his  account  with  Interest 
at  5  percent  on  the  amount  of  his  Investment  in  the 
business.  This  must  be  left  to  Individual  preference,  how- 
ever. Any  accounts  known  to  be  dead  should  be  charged 
off.  After  the  books  have  been  written  up  It  will  be  an  easy 
matter  to  determine  the  total  expeuses  for  the  month.  Find 
the  total  sales  of  all  kinds  and  divide  the  total  expense  by 
this  amount  and  It  can  be  easily  found  what  percentage  of 
the  sales  it  is  costing  to  conduct  the  UUsIness.  Right  here, 
however,  it  is  easy  to  drop  Into  error  as  follows :  Suppos- 
ing it  has  cost  20  percent  to  run  the  business,  stock  has 
been  bought  at  $30  and  It  Is  necessary  to  find  the  price  at 
which  it  must  be  sold  to  realize  10  percent  profit.  It  Is 
often  figured  as  follows  ;  Cost  $30,  plus  20  percent  expense 
$6,  plus  10  percent  profit  $3,  equals  $39,  the  price  at  which 
It  Is  to  be  sold.  Figure  back  a  minute  and  see  how  near 
this  Is  to  the  truth  :  $39,  less  20  percent  expense  $7.80,  leaves 
$31.20,   or   a  profit   of  $1.20,   which   is  about  3   percent   on 


CASH  BOOK  AND  JOURNAL 


CASH  BOOK  AND  JOURNAL 


C«S»  OFFICt  EXP.         GEK.  EXP.  L«B0I1  CO»l  lUKBEl 


dc^<r^t*r,        (1\0  ""■■         SU«0.  B«NK  IHT.  DISC.  MSB 


Fiij.   1 — Columnar  Cashbook  and  Journal.     Sketch  sent  docs  not  indicate  size. 

16 


the  selling  price.  The  delightfully  anticipated  profit  of  10 
percent  has  gone  glimmering.  The  problem  should  be  ap- 
proached in  a  different  way ;  10  percent  represents  the  profit, 
20  percent  the  necessary  expense ;  manifestly  the  cost  price 
represents  70  percent  of  the  selling  price,  so  to  arrive  at 
the  proper  selling  price  simply  divide  $30  by  .70,  which 
gives  $42.86,  the  correct  figure.  Accountants  always  figure 
profit  on  the  seillDg  price. 

At  the  end  of  the  fiscal  year  to  determine  the  result  of 
the  year's  operations,  bring  the  books  up  to  date,  being 
careful  to  see  that  all  obligations  Incurred  are  entered  and 
that  a  reasonable  amount  has  been  charged  off  for  deprecia- 
tion. Having  the  amount  of  stock  on  hand  of  lumber  and 
merchandise  deduct  each  amount  from  the  total  debits  of 
the  respective  merchandise  accounts.  The  difference  will 
in  each  case  Indicate  the  cost  value  of  goods  sold  during 
the  year.  Now  determine  the  total  amount  of  expense  for 
the  yeaV  and  the  total  sales.  Find  the  ratio  of  the  various 
sales  accounts  to  the  total  sales  and  apportion  that  amount 
of  the  expense  to  each  account.  Now  make  the  closing 
entries,  closing  out  all  the  expense  accounts  and  charging 
the  apportioned  amounts  to  the  respective  accounts  as  Indi- 
cated above.  The  credit  balance  in  each  account  will  in- 
dicate the  profit  made  in  that  department  during,  the  year. 
Rule  off,  transferring  the  several  balances  to  tho  credit  side 
of  the  profit  and  loss  account,  bring  down  to  th"  debit  side 
the  amount  of  the  inventory  and  the  books  are  ready  for  the 
start  of  another  year.  James  B.  Hunt. 

EDITORIAL  DISCUSSION. 

In  this  article  there  is  an  excellent  handling  and 
arrangement  of  accounts,  in  books  and  forms  which  in 
themselves  offer  no  particularly  novel  features.  The 
machine  sales  ticket  system  is  almost  exactly  that  de- 
scribed in  Mr.  Tessman's  article  last  published;  but 
there  the  duplicate  tickets,  assembled  in  numerical  order, 
formed  the  salesbook,  while  here  the  tissue  triplicate 
is  pasted  into  a  book  and  extended  into  columns.  The 
machine  ticket  appears  to  be  a  memorandum  only,  fol- 
lowed later  by  a  regular  invoice.  This  is  ordinary  com- 
mercial practice,  but  in  lumber  it  is  usually  considered 
practicable  to  price  and  extend  the  original  sales  ticket 
and  make  it  serve  as  an  invoice  also,  saving  labor  and 
postage.  Where  there  are  many  differences  between 
quantities  ordered  and  actually  delivered  foUow-invoic- 
ing  is  the  better  plan;  but  in  lumber  yard  practice  the 
man  writing  the  order  usually  knows  whether  it  can  be 
filled  or  not,  and  any  short  items  can  be  taken  care  .of 
by  no-charge-back  order  or  by  credit  memorandum,  with 
less  labor  than  would  be  involved  in  follow-invoicing 
every  sale. 

The  salesbook  described  has  separate  charge  columns 
for  each  kind  of  merchandise  according  to  whatever  divi- 
sion may  be  desired,  but  only  one  column  for  cash  sales, 
which   must    be    reviewed   and   the   merchandise    credits 


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Fig.  t — Stoc^  card,  5x8,  for  drawer  file.     Monthly  footing  shown  at  bottom. 


separately  distributed  to  the  several  merchandise  accounts. 
There  is  no  reason  why  the  salesbook  should  not  pro- 
vide columnar  distribution  to  merchandise  for  cash  sales 
as  well  as  charge  sales,  except  that  possibly  they  are 
fewer.  This  would  involve,  if  merchandise  is  divided  into 
three  classes,  say,  lumber,  coal  and  building  material, 
six  columns,  a  cash  and  a  charge  column  for  each  kind. 
Another  arrangement  would  provide  two  columns  for 
cash  and  charge  debits,  and  one  credit  column  for  each 
of  the  merchandise  classes,  or  five  in  all,  but  would 
involve  double  entry  of  each  item  amount,  once  in  the 
charge  or  cash  column  as  a  debit,  and  again  in  the  proper 
merchandise  column  as  a  credit.  Where  four  or  five  or 
more  merchandise  classifications  are  desired  this  is  the 
better  plan. 

The  columnar  ji)urnal  form  is  similar  in  principle  to 
that  described  in  the  third  prize  article,  but  does  not 
carry  as  many  columns,  leaving  more  accounts  to  be 
taken  care  of  by  ledger  postings  from  sundries  columns. 
The  classification  of  specific  expenses  is  fairly  complete 
and  adequate.  In  their  analysis  the  best  arrangement  is 
one  that  applied  them  progressively  to  the  material 
handled.  The  lumber  costs  a  given  average  price  f.  o.  b. 
at  yard.  To  receive  and  unload  it  and  carry  it  in  stock 
until  sold  costs  certain  direct  expense  and  a  certain 
proportion  of  overhead  expense,  producing  the  average 
cost  at  the  yard  gate  as  it  goes  out.  On  the  portion 
delivered  there  is  additional  teaming  cost,  and  another 
proportion  of  overhead  expense,  producing  cost  delivered 
to  the  customer.     To  this  is  added  the  cost  of  sales  and 

17 


collections,  including  advertising  etc.,  with  another  pro- 
portion of  overhead  expense  (which  totally  absorbs  it), 
and  the  result  is  the  final  delivered  cost  with  all  expense 
distributed  upon  it;  and  if  it  is  desired  to  make  10 
percent  upon  the  sales  price  it  must  be  so  fixed  that  the 
final  cost  is  90  percent  of  the  selling  price,  as  the  con- 
tributor has  illustrated. 

The  handling  of  petty  cash  account  separate  from  the 
main  cash  account  is  largely  in  line  with  the  third 
prize  article,  except  that  it  was  kept  there  by  machine 
cash  tickets,  which  took  the  place  of  a  cashbook. 

The  method  of  keeping  stock  account  by  card  system, 
a  separate  card  for  each  item  (several  lengths  on  one 
card)  has  been  recommended  by  previously  published 
contributions.  It  is  believed  that  the  form  here  sub- 
mitted would  be  improved  by  providing  three  contiguous 
columns  for  each  item,  one  for  receipts,  one  for  sales  and 
one  for  running  balance.  The  balance  would  be  extended 
only  as  the  information  is  required,  but  it  is  often  desir- 
able to  ascertain  this  as  to  any  certain  item  at  other 
times  than  at  the  periodical  balancing  indicated  in  Fig.  2. 
One  column  for  date  and  one  for  car  number  at  the  left 
would  answer  for  all  the  columns  across  the  card,  and 
both  material  received  and  material  sent  out  on  any  date 
would  go  in  their  respective  columns  on  the  one  line. 
The  most  complete  stock  system  contributed  remains  to  be 
published. 

In  the  estimate  plan  described,  deliveries  are  invoiced  as 
made  at  approximately  pro  rata  prices,  keeping  the  books 
in  substantial  line  with  the  transactions,  and  on  the  clos- 


ing  deliveries  on  the  estimate  the  charge  is  so  adjusted  as 
to  close  out  the  estimate  at  the  agreed  aggregate  price. 
Some  such  plan  is  generally  followed,  though  one  con- 
tributor not  yet  given  his  turn  at  publication  adopts 
the  theory  that  the  customer  has  not  earned  the  estimate 
reduction  until  he  has  filled  his  contract  by  taking  all 
the  material,  and  current  deliveries  are  priced  at  full 
price,  and  the  allowance  adjustment  credit  is  made  only 
at  the  close.  This  appears  to  be  good  practice,  and  the 
contract  as  a  matter  of  justice  should  provide  that  if 
the  customer  does  not  fulfil  his  agreement  to  purchase 
the  entire  bill  that  portion  actually  delivered  shall  be 
settled  for  at  the  usual  price.  The  reviewer  believes 
that  the  contract  itself  should  bill  all  the  material  at 
regular  price,  and  then  state  a  specific  sum  which  is  to 
be  allowed  by  way  of  reduction,  to  which  the  customer 
shall  become  entitled  when  he  has  completed  his  con- 
tract. Often  item  prices  are  not  extended  on  such  esti- 
mates as  given  the  customer;  but  even  in  these  cases  the 
total  given  should  be  the  current  price  total,  with  the 
special  reduction  to  be  allowed  separately  stated. 

Mr.  Hunt  submits  a  sample  of  ledger  page,  which  can 
be  described  in  smaller  space  than  would  be  required  to 
illustrate  it.  There  is  a  balance  column  down  the  center 
separating  the  two  halves  of  the  page.  The  left  or  debit 
side  is  the  conventional  form;  so  also  is  the  right  or 
credit  side,  except  that  the  money  column  is  moved  from 
the  right  over  to  the  left  of  the  date  and  explanation,  so 
that  it  comes  next  the  balance  column.  In  other  words, 
there  are  three  money  columns  in  the  center,  debits, 
balance  and  credits.  The  form  carries  a  sample  of 
handling  merchandise  account,  in  which  Mr.  Hunt  sub- 
tracts the  inventory  from  debits  instead  of  adding  it  to 
the  credits,  in  balancing  forward;  the  purpose  of  which 
may  need  a  word  of  explanation.  Merchandise  account 
as  usually  carried  represents  really  two  accounts.  Buying 
and  Selling,  and  often  two  accounts  are  used.  If  but  one 
account  is  used  the  debit  side  represents  inventory 
balance  and  purchases,  at  cost,  and  the  credit  side  rep- 
resents total  sales,  at  selling  price.  But  in  buying  there 
are  often  credits,  as  for  allowances  on  claims;  and  in 
selling  often  there  are  debits,  for  merchandise  returned 
and  for  allowances  on  complaints.  In  order  to  keep  the 
two  functions  of  the  two  sides  of  the  account  separate, 
buying  credits  should  be  subtracted  from  the  debit  side, 
and  in  closing,  the  inventory  should  also  be  subtracted 
from  it;  and  merchandise  debits  should  be  subtracted 
from  the  credit  or  selling  side  as  a  deduction  from  total 
sales;  otherwise  the  account  would  represent  a  greater 
amount  of  merchandise  bought  and  sold  than  has  actually 
been  the  case. 

In  the  third  prize  article,  last  published,  it  was 
announced  'that  the  billing  and  charging  system  there 
described  was  of  a  high  order  of  merit.  Briefly  com- 
paring with  the  present  one,  the  former  first  wrote  the 
order  on  a  yard-order  card  and,  when  filled,  invoiced  in 


triplicate,  using  one  numerical  set  as  the  sales  record, 
with  no  bound  salesbook.  This  one  makes  the  original 
a  triplicate  memo,  pastes  the  triplicate  in  a  salesbook, 
prices,  extends  and  makes  a  pen  invoice.  Thus  far  labor 
is  about  even,  with  two  writings,  though  it  takes  some 
extra  time  also  to  paste  up  the  tissues;  from  there  the 
plans'  vary.  Mr.  Tessman  posts  to  the  monthly  state- 
ment and  at  the  end  of  the  month  posts  the  current  total 
of  statement  to  ledger  account  and  carries  the  ledger 
balance  to  the  statement,  completing  it  for  mailing. 
Mr.  Hunt  follows  the  old  routine,  posting  to  ledger  and 
making  the  statement  at  the  end  of  the  month. 

There  is  always  the  question  in  a  bookkeeping  system 
as  to  how  far  the  records  may  profitably  be  simplified  as 
a  labor-saving  expedient;  and  this  question  is  largely 
in  how  far  the  details  of  the  transaction  may  be  left  to 
the  original  entry  and  in  how  far  they  need  to  be  car- 
ried forward  with  the  posting  of  the  net  results.  To  get 
at  the  original  information  Mr.  Tessman  has  to  go  back 
through  statement  and  invoice  and  order  numbers  to  the 
original  yard  order.  Mr.  Hunt  has  only  to  go  from  the 
ledger  account  to  the  sales  book  page  in  which  the  orig- 
inal entry  tissue  is  pasted.  His  plan  takes  less  time  in 
reference,  when  reference  is  needed.  It  takes  more  time 
to  make  the  record,  including  the  ledger  and  monthly 
statement.  The  question  therefore  is:  "How  often  is  it 
really  necessary  to  look  up  the  original  entry?"  The 
answer  to  that  question  determines  in  how  far  it  is  desir- 
able to  save  reference  time  in  a  certain  proportion  of 
transactions  where  reference  is  necessary,  by  expending 
extra  recording  time  on  every  transaction. 


Practical  Methods  that  SimpHfy  Diversi- 
fied Accounts — Feature  that  Aids  Col- 
lection— Up-to-the-Minute  Systems  Il- 
lustrated— Conveniences  in  Book  Form 
— Handy  References  That  Are  Imme- 
diately Available. 


FOURTH   PRIZE   ARTICLE   NUMBER   TWO. 

In  describing  the  methods  of  accounting  used  by  the 
writer  it  is  assumed  that  a  new  set  of  books  is  to  be  opened 
by  a  new  company  in  the  retail  lumber  field.  Someone  must 
be  employed  to  keep  the  books  of  the  concern  who  under- 
stands the  common  methods  of  bookkeeping.  He  must  select 
his  own  books.  The  writer  offers  his  assistance  In  selection 
of  them. 

The  simplest  yet  most  accurate  and  best  set  of  books  to 
open  up  are  a  ledger,  combined  cashbook  and  journal  (here- 
after referred  to  as  Journal),  daybook  and  billbook,  a  credit 
memorandum   book,    an   estimate   book,    stock-on-hand   book 

IS 


and  order  book.  These  books  are  to  be  supplemented  by  a 
sale  ticket  book  on  the  person  of  everyone  connected  with 
the  selling  of  material  handled  in  yard. 

The  ledger  should  be  a  looselcaf  book.  A  statement  of 
the  actual  assets  and  liabilities  of  each  member  of  the  Arm 
is  made  and  is  entered  under  stock  account  of  each.  Then 
open  a  merchandise,  machinery,  coal,  miscellaneous,  build- 
ings and  fixtures,  bills  receivable,  bills  payable,  expense, 
freight  and  express,  salaries,  .insurance,  interest,  collections 
and  exchange,  advertising,  lost  accounts  and  notes,  loss  and 
gain  and  taxes  accounts. 

These  accounts  are  open  and  entered  in  journal  with 
rulings  shown,  a  separate  entry  for  each  member  of  firm 
for    amount   invested    in    miscellaneous    column   to    right    of 


ORDER  BLANK 


please  ship  via 

The  following  items,  to-wit :     When.. 


J>lcaae  do  not  fail  to  pat  onr  order  No.  on  your  bill,  and  oblige, 

Yonia  troly^ '.. 

Town State 

Kcmarkt : 


Fig.  1.     Fnrcliaxe  Order,   '>.35xfiS>  inclii.t  liigh. 

name  and  to  cash  received,  bills  received,  or  miscellaneous 
column  to  left.  It  is  now  plain  that  a  double-entry  system 
is  to  be  used  in  all  transactions.  Entries  are  made  for 
buildings  and  fixtures,  real  estate  etc.  and  posted  to  ledger. 
Now  that  the  resources  are  known,  yard  is  ready  to  be 
stocked  up. 

The  writer  will  take  a  car  of  material  and  follow  transac- 
tions from  order  to  collection  from  buyer  of  part  of  car. 
The  order  is  made  out  in  order  book  and  carbon  copy  left 
in  book.  Invoice  of  car  is  received  which,  tor  example,  is 
a  car  of  2x4s.  Bill  is  either  discounted  or  note  given.  Enter 
on  journal  in  cash  paldout  column  and  lumber  column,  or 
bills  payable  and  lumber  columns.  Invoice  is  then  filed  in 
a  file  and  binder  of  letter  size.  Other  invoices  are  filed  as 
they  come  in  and  arranged  alphabetically  according  to  firm 
names.  At  the  end  of  the  month  take  volume  from  file  and 
place    a    heavy    piece   of   paper   on    top   and   bottom,   fasten 


No_ 


-181. 


P. 

o 

mu\                     DESCBIPTIOII 

FEET     1  PUCE 

tinuiiT 

RECEIVED  ABOVE  MATERIAL 


SMned 


Fig.  2.     Sales  Ticket,  4.S5x6  inches  high. 

whole  and  label  top  in  the  following  manner :  Invoices, 
month,  year  and  Journal  pages.  When  these  bills  are  posted 
to  ledger,  and  we  wish  to  And  a  certain  bill,  we  refer  to 
the  credit  side  of  the  firm's  account  and  And  the  Journal 
page ;  then  look  for  file  of  bills  which  has  on  It  this  number 
and  as  they  are  alphabetically  arranged,  it  may  be  easily 
found. 

The  car  arrives  with  way  bill  calling  for  freight,  demurrage, 
transfer  etc.  Make  entry  In  Journal  and  post  to  ledger. 
Lumber  is  piled  in  shed  and  inventory  made  of  same  to 
check  Invoice.  If  not  correct,  handle  through  loss  and  gain 
account,  or  if  difference  Is  too  great  make  protest  to  shipper 
and  debit  his  account  the  amount.  Entry  is  then  made  on 
stockbook  of  number  of  various  lengths.  Sample  sheet  Is 
shown. 

John  Doe  buys  a  bill  of  lumber  from  estimate  given  him 
from  estimate  book.  He  gives  his  signature  on  same  show- 
ing how,  when,  where  bill  is  to  be  paid,  his  address,  loca- 
tion and  kind  of  building.  These  points  are  Important,  as 
they  very  materially  help  collection  of  bill.  Mr.  Doc  Is 
charged   on    daybook   credit   sales   column   with   amount   of 


estimate.  He  takes  copy  of  estimate  and  loads  his  wagon. 
The  yard  man  makes  out  a  sale  ticket  for  material  taken 
and  gives  copy  to  Mr.  Doe.  The  amount  taken  Is  then 
charged  on  estimate  page  and  any  balance  can  be  delivered 
at  a  moment's  notice  by  looking  at  amounts  delivered  and 
amounts  charged.  If  an  additional  cash  sale  to  estimate  Is 
made,  sale  is  handled  In  like  manner  only  in  cash  sales 
column  of  daybook.  Whenever  Mr.  Doe  takes  material  on 
estimate,  same  Is  charged  him  In  lumber  column  In  daybook. 
Sale  tickets  are  made  for '  every  transaction  in  the  course 
of  the  day's  business.  At  the  end  of  each  day  or  longer 
period  of  business  sale  tickets  are  numbered,  entered  in 
daybook  as  above  described,  posted  to  ledger  and  ledger  post- 
ing entered  In  daybook  ledger  column.  Ticket  number  la 
posted  in  ledger. 

The  daybook  is  always  balanced  and  manager  or  owner 
of  the  yard  using  this  form  of  book  can  tell  at  a  glance  his 
day's,  Week's,  month's  credit  sales,  cash  sales  and  total 
sales,  in  lumber,  machinery,  coal  or  whatever  he  may  deal 
In.  The  writer's  yard  handles  lumber,  machinery,  harness 
and  in  the  miscellaneous  column  wood  and  coal.  A  stock 
sheet  for  other  than  lumber  classified  can  be  kept  on  same 
daybook  sheet  for  each  day.  Here  the  general  stock  in 
lumber   can    be    seen    at   a   glance   and    a   correct    inventory 


can  be  had  at  any  time.  Same  Is  shown  In  machinery, 
harness  and  wood  and  coal. 

The  manager  of  a  yard  with  a  daybook  like  this  one  will 
never  be  without  an  article  that  is  in  constant  demand  be- 
cause he  Is  shown  at  a  glance  In  the  office  how  near  the 
low  mark  he  Is  approaching  and  can  write  his  orders  ac- 
cordingly. Shortage  on  material  cuts  the  profits  and  loses 
trade.  In  a  busy  yard  low  stock  is  often  overlooked.  A 
few  minutes'  time  In  this  daybook  will  keep  up  profits  and 
sales.  There  is  no  limit  to  the  additional  columns  or  space 
that  can  be  added  to  supply  the  demand  of  any  retail  yard's 
business  with   side  linos  connected. 

Any  dispute  regarding  delivery  can  be  found  direct  from 
daybook  sale  ticket  column  or  name  column  if  ledger  is  in 
use.  Trial  balances  must  be  checked  from  same  ;  comparison 
of  sales  made  for  any  tiiSe  period ;  a  yearly  or  monthly 
statement  of  condition  of  stock  and  in  connection  with 
Journal  of  the  condition  of  business  done.  With  these 
two  books  nearly  all  questions  a  manager  can  ask  regarding 
his  business  can  be  answered  quickly  and  correctly,  doing 
away  with  the  time  lost  it  would  take  him  to  go  through 
a  ledger.  Journal,  cashbook  and  what  not  of  regular  ruling. 

The  agreement  entered  into  with  John  Doe  is  now  due. 
He   pays   part   cash   and   gives   note   for  balance.     A    credit 


0 


ESTIMATE 

Date 


No. 


190 


Alt  KigMi  Kttftyta 

For  Mr.-.. 

P.  0.  Address 

Location     , 


■ L«« 


State   Terms  In  Pmlf 


The  Mtomng  prices  are  tor  Immediate  aeeeptanee  only.    Clerical  errors  subfect  to  correction 


OM« 

TEAMSfER 

* 

_ 

SELLING  PRICE 


COST   PRICE 


DEUVmiKS 


•KlUNa  rmct  • 


COST  RMICt  • 


SPECIAL  REMARKS 


Sipiatare, 


Fig.  3.     Estimate,  10x16  inches  high. 


19 


memo  is  made  out  for  note  and  receipt  given  lilm  for  cash 
-  payment.  Slip  is  numbered  and  entered  in  Journal  under 
personal  accounts  credit  column  and  cash  received  and  bills 
receivable  debtor  columns.  His  note  becomes  due  in  the 
biUbook,  used  as  a  memorandum  tor  notes  and  time  drafts 
showing  when  become  due ;  any  payments  made,  security 
given,  renewals,  location  of  indorser,  and  remarks  regarding 


his  credit,  payment  Is  made.  A  credit  ticket  Is  made  out, 
numbered,  dated  and  entered  in  bills  receivable  column  for 
face  of  note,  interest  in  Interest  column  and  entry  balanced 
in  cash  received  column.  Other  transactions  are  handled  In 
respective  columns.  Insurance,  for  instance,  would  be  en- 
tered In  cash  paid  out  and  cash  expended,  yard  column. 
Freight  same.     Stationery   is  entered  in   cash  paid  out   and 


cash  expended  expense  columns.  Salaries  account  Is  handled 
In  like  manner.  These  entries  are  then  posted  to  ledger 
to  corresponding  accounts. 

In  the  lower  rulings  to  the  left  one  glance  will  show 
balance  of  cash  on  hand  In  office  and  bank  balance.  Middle 
rulings  show  total  outstanding  accounts,  always  In  balance. 
To   the  right   bills  receivable  account   Is  balanced,   with   the 


DAY  BOOK 


SHEET  NO^ 


Yard- 


Date- 


-191 


-Agent 


WINDOW!     SCREENS 


fOOFING 

wo-tqus. 


COAL 

HARD 

NO.  TONS 


CO»l 

SUET 

NO.  TON! 


BUGGIE!     WAGON!        BOBS 


COLLARS     SADDLES 


SINGLE 
HARNESS 
NO.  SETS 


wMb 

CHUNKS 
NO.  CORO! 


TOTAL  FOR  DAY 


FORWARDED 


TOTAL  FOR  MONTH  T(l  DATR 


Fig.  i.     Salesbook,  line  form.     Single  yard  form  is   the  same  with  stock  record  omitted. 

20 


last  entry  on  a  credit  slip.  The  advantages  of  this  journal 
are  Innumerable.  For  example,  the  firm's  resources  and 
liabilities  always  ai;e  on  hand  at  the  close  of  a  day's  business. 
Expense  of  carrying  on  same  ;  amount  of  collections ;  Interest 
on  accounts ;  total  outstanding  accounts  ;  in  fact,  everything 
to  help  the  manager  in  pushing  the  button  for  more  speed 
or  less  pressure  in  any  department.  Time  is  saved  in  being 
able  to  know  all  details  of  his  management  and  he  has  posi- 
tive evidence  at  all  times  of  the  condition  of  his  management. 

The  stockbook  may  be  either  a  bound  volume  or  looseleaf 
book  ruled  with  spacing  shown.  It  is  an  invaluable  asset 
to  the  yard  management.  The  date  of  shipment  received 
and  car  number  with  initials  is  entered  in  the  column  headed 
Date.  Number  of  pieces  of  material  received  in  column  cor- 
responding to  their  length  or  size.  When  sale  tickets  are  all 
numbered  and  posted  amount  of  sales  may  be  entered  from 
them  to  stock  sheet.  This  may  be  done  dally  or  weekly 
according  to  amount  of  sales.  Sales  and  receipts  are  then 
totaled  and  balance  on  hand  obtained  and  forwarded  to  next 
sheet  in  receipts  column.  On  the  last  sheet  of  each  week, 
month  or  on  the  daily  sheet  a  graphic  illustration  of  the 
total  sales  may  be  made  with  red  ink  by  stock  clerk  or  book- 
keeper. With  the  figures  to  the  extreme  left  of  sheet  and 
red  line  a  profile  of  sales  Is  shown.  The  best  sellers  of  any 
line  of  material  is  very  readily  seen.  To  keep  stock  In  the 
best  condition  possible  the  manager  of  yard  must  beware  of 
the  two  extremes  of  this  profile.  He  can  arrange  his  orders 
from  same,  by  ordering  a  greater  percent,  or  less  as  the 
case  may  be,  of  any  one  length  or  kind  of  material. 

The  above  described  books  may  be  very  profitably  used  by 
a  branch  or  a  line  of  yards.     The  bills  payable  columns  are 


NOTE    RECORD- . 


^Station 

famm 


Fig.  6.    Note  Record,  loose  leaf  5x8  inches  wide,  includ- 
ing binding  margin. 


Account- 


changed  to  general  office  col- 
umns. Only  one  column  Is 
used  to  the  lower  left  in  cash 
balance  on  hand  ruling.  All 
general  accounts  are  placed  to 
the  general  office  columns. 
Buying  freight,  real  estate,  In- 
surance, taxes  etc.  are  all 
handled  by  the  general  oflice. 
The  agent  has  only  the  selling 
part  of  the  business  to  care  for. 

In  this  case  journal  and  day- 
book are  made  with  a  white 
sheet  and  a  yellow  sheet  for 
a  carbon  duplicate  to  be  taken 
along  perforated  line  and 
mailed  to  general  office.  A 
looseleaf  ledger  of  same  rulings 
Is  kept  by  line  yard  with  a  cash 
account,  bills  receivable  ac- 
count and  general  office  ac- 
count and  all  personal  accounts.  Sale  ticket,  receipt  book, 
estimate  book  are  made  with  two  carbon  sheets ;  one  for  cus- 
tomer and  the  other  for  general  office.  The  original  Is  kept  in 
book  of  line  yard.  Stock  sheet  may  be  made  In  duplicate  and 
sent  to  general  office,  but  the  general  stock  report  on  right 
of  daybook  sheet  should  be  suflJclent  Information  for  general 
office,  as  the  yard  agent  orders  from  his  detailed  stock  sheet. 
The  general  office  is  given  a  complete  inventory  of  stock  on 
hand  dally  from  daybook  sheet.  The  yard  agent  has  a  more 
complete  itemized  Inventory  of  his  yard  at  any  time.  , 

In  short,  the  books  and  system  herein  described  may  well 
be  entitle*  "Up-to-the-Minute  Business  Methods"  tor  retail 
lumber  dealers.  Almost  any  question,  let  the  writer  em- 
phasize, can  be  answered  by  a  yard  manager  using  this 
system  in  three  words :  "Walt  a  minute."  He  looks  at 
whatever  column  the  question  pertains  to  and  shows  positive 
proof  as  to  his  final  answer.  A.  K.  Grubb. 

Deapolls,   N.   D. 

EDITORIAL  DISCUSSIOK. 

A  number  of  the  contributions  received  submitted 
accounting  systems  as  specialized  for  lineyard  use,  the 
branch  yard  handling  only  the  selling  and  local  ex- 
pense accounts  and  the  general  accounts  being  kept  at 
the  home  office.  It  seemed  desirable  that  this  special 
department  of  lumber  yard  bookkeeping  should  have 
recignition,  and  Mr.  Grube's  contribution  is  accepted 
as  one  of  the  simplest  and  most  complete  in  this  class, 
and  adaptable  either  to  line  yard  or  single  yard  use. 

"What  the  contributor  calls  a  "daybook"  in  his  text 
is  reproduced  in  Fig.  5,  and  is,  as  there  titled,  really  a 
salesbook  because  it  records  nothing  but  selling  trans- 
actions. A  second  form  was  submitted  for  single-yard 
use,  in  which  the  money  columns  were  the   same   as 

21 


FIRM   NAME 

Wood,  Coal  and  Lumber 
SAMPLE  CREDIT  MEMO.  Dale  . 

Name 


riril_ 


D<^ic 


Lin.  Feci       Bd.  Feci         Price 


Fig.  7.      Credit,  memo.,  pink  stock,  4x7  inches  wide. 


here  shown,  but  lumber,  machinery,  lumber  and  miscel- 
laneous are  represented  by  money  columns  only,  and 
the  quantity,  columns  for  lumber  and  moldings  are 
omitted.    The  stock  sheet  columns  to  the  right  are  also 


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12  UgM 

8  LtgM 

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lojia 

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TT 

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T.,..l  Rrr,-,... 

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Fig.  8.     Corner  of  stock  record  sheet,  17  inches  square. 
Note  diagram,  line  near  bottom. 


omitted  and  the  ruling  occupies  half  the  sheet  and 
is  repeated  on  the  other  half.  For  lineyard  use  these 
original  entry  books  are  printed  on  righthand  page, 
one  side  of  sheet  only,  and  are  made  in  duplicate, 
white  sheet  perforated  to  detach  and  send  in  and  rail- 
road manila  duplicate  remaining  in  the  book  as  the 
yard  record. 

Inasmuch  as  duplicates  of  the  numbered  sales  tickets 
(Fig.  2)  are  mailed  to  the  home  office  it  is  not  clear 
what  good  purpose  is  served  by  writing  the  names  of 
customers  on  the  sales  sheet.  Why  not  use  ticket  num- 
bers only  and  save  the  extra  writing 

The  condensed  stock  report  is  excellent  as  a  means 
of  keeping  the  home  ofSce  informed  as  to  condition  of 
stock  and  reminding  the  local  manager  of  articles  need- 
ing attention.  It  is  evident,  of  course,  that  some  sepa- 
rate figuring  is  required  in  order  to  condense  the  day's 
results  into  this  form,  but  it  is  quite  desirable  that  this 
be  done. 

The  combined  cashbook  and  journal  of  columnar  form 
is  well  devised  and  the  summary  forms  at  the  bottom 
arc  a  customary  featiire  of  line  forms,  but  the  arrange- 
ment here  is  simpler  and  better  than  in  some  of  the 
complicated  forms  used.  A  peculiarity  of  the  money- 
column  arrangement  is  that  whereas  in  columnar  jour- 
nals if  the  money  columns  are  separated  into  two  divi- 


Enter  0.  G.  Batts,  O.  G.  Casing— Lineal. 

Enter  Mouldings,  all  kinds— Lineal 
Plain  Casing  enter  as  Finished. 
No.  1  Fencing  enter  as  Finish. 
J^  X  3  Batts— Surface  Measure. 
Enter  all  Coal  in  Pounds. 
Dimension  in  Pes. 

'*    10  ft.  when  no  space  is  given  as  halves  of  20  ft. 

"      8  "      "  "  "  "       of  16  ft. 

"     0  "      "  "  "  "      of  12  ft.,  etc. 

Ending J  90. 


'ttf. 


Fig.    9.     Instructions   printed    on    one    corner   of    Stock 
Sheet. 

sions  the  left  is  a\\  debits  and  the  right  all  credits, 
this  form  is  so  classified  that  transactions  involving 
the  receipt  of  money  will  go  into  the  right-hand  columns, 


while  cash  payments  are  taken  care  of  in  the  left-hand 

columns.  Separate  columns  are  provided  for  petty 
expense  and  yard  expense.  An  interest  column  is  pro- 
vided at  the  right  for  interest  received,  in  connection 
with  notes  receivable,  but  none  for  interest  paid  out,  so 
presumably  it  is  charged  into  the  expense  column. 

Usually  a  columnar  journal  is  so  arranged  as  to  take 
care  of  all  classes  of  transactions  and  shows  sales  also, 
posted  in  a  single  daily  entry  from  the  sales  book  totals, 
which  are  then  dropped  and  new  totals  accumulated 
for  the  next  day's  sales.  Here  the  sales  book  is  a 
separate  direct  posting  record,  and  while  the  totals  are 
carried  forward  from  day  to  day  they  are  carried  to  the 
foot  instead  of  head,  and  the  day's  total  is  exhibited 
before   being  merged   with   the   total   forward. 

Some  line  forms  submitted  extend  cost  price  as  well  as 
selling  price  on  each  sale  and  figure  the  daily  sales 
profits  on  the  daily  report.  This  requires  twice  as  much 
labor  in  extension.  In  this  system  the  profit  results  are 
exhibited  by  inventory  in  monthly  closing,  and  a  perpet- 
ual stock  record  is  kept.  A  printed  stock  sheet  is  sub- 
mitted, about  seventeen  inches  square,  printed  on  both 
sides  and  with  a  capacity  for  267  separate  items,  mostly 
printed  in  but  with  some  blank  columns  left  for  addi- 
tions. On  account  of  its  size  only  a  comer  of  the 
cOiQot  naa  be  reproduced,  showing  the  arrangement.     The 


Fig.  5.     Journal,  with  special  recapitulations. 


lower  portion  is  used  to  record  amounts  from  sale  tickets, 
which  are  then  totaled  and  deducted  from  on  hand  and 
received.  In  the  lower  space  a  diagram  line  is  drawn  to 
represent  amount  of  sales,  based  on  the  marginal  quanti- 
ties, and  its  fluctuations  show  relative  activity  of  the 
stock  items.  In  drawing  this  line  the  columns  in  which 
there  have  been  no  sales  are  ignored  and  it  is  drawn 
straight  toward  the  proper  indicating  point  in  the  next 
succeeding  column  in  which  sales  are  recorded.  Only 
the  angles  of  the  line  therefore  are  to  be  read  as  having 
significance. 

The  note  record  (Fig.  6)  is  a  special  looseleaf  form  of 
excellent  arrangement.  The  sale^  ticket  needs  no  com- 
ment except  to  call  attention  to  the  fact  that  it  has 
column  for  pieces  as  well  as  feet,  which  is  desirable. 
Sales  tickets  are  often  used  for  credits  and  acknowl- 
edgments of  cash  on  account,  and  entered  through  spe- 
cial column  in  sales  journal.  Here  a  special  credit  ticket 
is  provided  in  duplicate,  and  there  is  also  a  cash  receipt 
form.  The  systematic  use  of  a  printed  numbered  pur- 
chase-order form  is  desirable.  The  lumber  salesman 
and  his  duplicate-order  book  usually  look  after  this,  but 
it  is  better  to  handle  purchasing  on  own  order  numbers, 
even  though  in  certain  cases  it  may  be  convenient  to 
issue  order  onlyas  a  dummy,  inserting  amount  and  con- 
firming attached  copy  of  sEilesman's  order  and  referring 
to  it  for  details. 

The  estimate  form  submitted  is  a  good  standard  form 
which  other  contributors  also  have  sent  in.  It  is  repro- 
duced here  for  once  and  for  all  and  will  be  referred  back 
to  as  necessary.  The  customer's  copy  of  course  is  per- 
forated to  tear  off  the  cost  price  column.  It  would 
appear  from  the  contributor's  description  that  the  cus- 
tomer is  charged  with  the  total  amount  of  the  estimate 
to  start  with,  and  that  lumber  (or  whatever  merchandise 
concerned)  is  credited  with  deliveries  only  as  made,  aud 
that  therefore  the  daybook  will  be  out  of  balance  with 
the  amount  remaining  undelivered,  until  the  transaction 
is  closed.  It  might  be  better  to  segregate  this  suspense 
difl'erence  by  having  an  additional  pair  of  columns  for 
estimates.  Credit  this  column  with  the  total  ?um  when 
customer  is  charged,  and  charge  it  with  deliveries  when 
merchandise  is  credited  with  them,  and  let  it  carry  the 
dift'erence  until  closed  out,  not  only  with  this  one 
customer  but  with  the  entire  lot  of  estimates  partially 
filled,  so  it  will  show  the  value  of  balance  undelivered 
at  all  times  and  yet  leave  the  boolf  as  a  whole  in  balance. 

The  system  here  described  appears  to  supply  all  the 
specialization  required  for  branch  line  yard  accounting, 
and  yet  to  answer  equally  well  the  requirements  of  a 
simple  system  for  a  small  single  yard  which  summarizes 
and  presents  the  results  of  the  day's  business  in  a  man- 
ner which  does  not  require  trained  accounting  experience 
either  to  write  up  or  to  understand. 


A  Minnesota  Retailer's  Contribution — 
Sales  and  Credit  Tickets  Filed  in  Ver- 
tical Folders  for  Each  Customer — Daily 
Statement  Form  of  Journal — Good 
Auxiliary  Forms. 


SYSTEM  FOR  AN  AVERAGE  YARD. 

Responding  to  your  request  tor  letters  on  methods  of  book- 
keeping I  am  sending  you  a  description  of  a  system  that  I 
have  used  for  the  last  six  years  and  have  found  simple, 
labor  saving  and  adequate  for  the  average  retail  yard.  The 
necessary  equipment  for  this  system  Is  as  follows : 

Duplicate  sales  ticket  books  (Fig.  1). 

Duplicate  credit  ticket  books   (Fig.  2). 

Six  covers  tor  the  above. 

One  vertical  file  with  Index  cards,  500  plain  folders 


No.  ^•^*      Houston.  Mbn 


d. 


,191 


Mr. 


WE  CREDIT  YOUR  ACCOUNf 

ByCuh 

By  Uercbandite      ■    ■    ■ 
By  Discount  ..... 

T0TAL'-7,«Hc.  ACCOUNT 


with  thanks  and  soliciting  your  future  patronage,  we  are, 
Yours  truly,  PETERSON  &  IVERSON, 

Per ....;... 


Vxg.   2 — Credit   memorandum   form,  same   size   as  sales 

ticket,  and  duplicate  is  filed  in  customer's  folder 

in  the  same  manner. 

23 


and  one  colored  folder  for  each  Index  card :  this  file  to 
be  of  convenient  size  for  holding  sales  tickets. 

Special    ruled    and    printed    loose    leaf    dally    record 
sheets    (Figs.   3  and  4). 

One  springback  binder  for  record  sheets. 
One   transfer  binder  for  record  sheets. 
Loose  leaf  ledger  with  two  sets  alphabetical  Indexes, 
and  one  set  of  index  tabs  for  subdivisions  of  merchan- 
dise accounts. 

One  transfer  binder  for  ledger. 
One  31-day  desls  tickler. 
One  duplicate  remittance  book   (Fig.  5).- 
One  trial  balance  book  for  accounts  receivable. 
Duplicate  order  books   (Fig.  6). 
I    have   found    in    using   the    ordinary    lumber   sales   book 
that  fully  one-fourth  of  the  time  required  for  the  book  worli 
was  taken  up  copying  the  original  entries  from  memorandum 
books  into  the  salesbook.     This  time  is  saved  by  using  dup- 
licate sales  tickets,  bound  in  book  form,  fifty  originals  and 
fifty  duplicates.     These  books  are  slipped  into  covers  made 
for    the    purpose    and    can    be    conveniently    carried    in    the 
pocket.     Original  entries  of  sales  are  made  in   these  books 
and  no   copying   is   necessary.      Some   make   an   objection   to 
tickets   on    account   of   the   danger   in    losing   or   misplacing 
them,  but  if  books  are  made  with  only  originals  perforated 
this  trouble  is  avoided.     The  duplicates  then  remain  in  book 
form,  after  originals  are  taken  out,'  and  are  filed  away,  be- 
coming a  permanent  record  which  can  be  referred  to  should 
original  become  lost  or  misplaced. 

After  being  entered  on  dally  record  sheet,  mentioned  above, 
the  original  sales  tickets  are  filed  In  a  vertical  file,  each  cus- 
tomer having  a  plain  individual  folder.  Tickets  for  petty 
accounts  are  filed  together  In  colored  folders,  of  which  there 
are  one  for  each  index  card.  By  this  method  sales  to  any 
one  party  are  found  together  in  one  folder.  These  tickets 
can  be  easily  taken  out  and  checked  with  the  ledger  account 
or  estimate,  and  on  Itemized  account  can  be  made  in  short 
order. 

The  duplicate  credit  tickets  for  cash  on  accounts  and  on 
notes  receivable,  merchandise  returned  and  discount  are 
bound  In  book  form  the  same  as  sales  tickets,  but  are  of 
different  color.  When  cash  is  paid  on  account  original  is 
slipped  out  and  given  to  the  customer  as  receipt ;  in  case 
of  merchandise  returned  or  discount  original  Is  filed  In 
folder  with  sales  tickets.  By  using  this  method  for  all 
credits  on  account  one  Is  sure  that  all  credits  are  booked 
and   trouble   from   that  source   is   avoided. 

The  daily  record  sheet  Is  a  combination  of  recapitulation 
sheet  for  sales  tickets  on  one  side  and  journal  and  cash  ac- 
count on  the  other. 

Sales  tickets  are  numbered  and  entered  on  recapitulation 
sheet,  the  Items  being  separated  and  entered,  quantity  and 
amount,  under  the  sulxllvisions  of  merchandise,  such  as 
lumber,  sblngles,  lath,  millwork,  moldings,  doors  and  win- 
dows, paper  etc.,  total  amount  of  each  ticket  being  entered 


In  "total  amount"  column.  After  tickets  for  day  are  all 
entered  columns  are  all  footed  and  the  sum  of  "amount 
footings"  should  chock  with  sum  of  "total  amount"  column. 
This  will  prove  addition  on  all  sales  tickets  for  day.  Quantity 
and  amount  totals  are  transferred  from  recapitulation  sheet 
to  sales  account  on  Journal  sheet.  Cash  sales  tickets  are 
checkmarked  when  entered  on  recapitulation  sheet  and  total 
entered  in  cash  account  as  cash  sales. 

Sales  tickets  for  credit  sales  are  next  entered  under  credit 
sales  on  journal  sheet,  name  of  customer,  amount  of  ticket 
and  number  being  entered.  Cash  sales  and  credit  sales  are 
totaled  to  check  with  sales  account  total. 

From  credit  tickets  cash  on  account  is  entered  direct  to 
cash  account,  name  and  amount  of  payment  being  entered. 
Merchandise  returned  and  discount  are  journalized  under 
journal  entries,  merchandise  being  separated  as  on  recapitu- 
lation sheet. 

Credit  sales  for  day  are  added  to  accounts  received  for- 
ward and  cash  on  account,  merchandise  returned  and  dis- 
count on  accounts  received  subtracted  from  this  sum,  giving 
accounts  received  outstanding. 

Expense  bills  are  entered  direct  to  cash  account.  Remit- 
tances are  entered  from  duplicate  remittance  book.  Invoices 
are  journalized  under  journal  entries,  merchandise  being  sepa- 
rated tor  the  dl£ferent  accounts.  After  booking,  invoices  are 
filed  ahead  in  a  31-day  desk  tickler. 

Ledger  Is  divided  Into  three  sections :  merchandise,  ac- 
counts and  notes  receivable  and  general  accounts  and  ac- 
counts payable.  No  cash  account  Is  carried  in  ledger,  there 
being  no  necessity  for  It. 

From  record  sheet  merchandise  Is  posted  to  the  different 
accounts  In  merchandise  section  of  ledger,  both  quantity  and 
amount  being  posted.  At  the  end  of  month  columns  are 
totaled  in  red  ink  and  carried  forward.  In  this  way  the 
merchandise  accounts  also  become  a  stock  sheet,  which  is 
kept  without  any  special  effort.  This  stock  sheet  may  not 
be  as  extensive  as  some  others,  but  Is  adequate  to  locate 
shortages.  If  any,  and  to  determine  size  of  stock  in  case  of 
Qre  or  other  accident,  and  we  believe  that  the  above  described 
method  will  serve  the  purpose  tor  the  average  individual 
yard,  where  the  stock  Is  under  the  eye  of  the  manager.  If 
in  addition  to  the  above  the  yard  stock  is  filed  and  stored 
systematically  and  a  duplicate  order  book  is  used  for  all 
orders,  no  dealer  need  go  very  far  wrong  In  ordering  or 
selling  material. 

In  accounts  received  section  of  ledger  the  first  page  after 
each  Index  sheet  Is  used  for  petty  accounts.  This  makes  it 
more  convenient  to  take  off  a  trial  balance  of  accounts  re- 
ceived, which  Is  taken  at  the  end  of  every  month.  A  trial 
balance  book  ruled  for  twelve  months  is  used.  Trial  balance 
is  checked  with  accounts  received  outstanding  on  record 
sheet.     Statements  sent  out  are  noted  on  trial  balance. 

I.  G.  IVERSON,  Successor  to  Peterson  &  Iverson. 

EDITOEIAIi  DISCUSSION. 

The  system   described   has  some   resemblance   to  that 


submitted  by  A.  K."  Grube  and  already  published,  Mr. 
Grube  using  separate  salesbook  or  sheet  rnd  cashbook- 
journal  sheet,  while  herein  both  are  combined  on  one 
large  loose  leaf  page,  the  back  used  for  sales  recapitula- 
tion and  distribution  to  merchandise  accounts.  The  mer- 
chandise classification  is  very  complete  and  carries  quan- 
tities as  well  as  values,  which  also  go  to  the  ledger  and 
are  noted  in  the  explanation  column. 

The  form  of  daily  statement  is  much  like  that  often 
used  in  lineyard  work,  though  the  contributor  evidently 
uses  it  for  a  single  yard  only.  By  a  summarization  of 
tickets  on  which  the  transactions  are  first  recorded,  the 


UoJ.lpb     Hou«on,Miim 'j':^    \9\C> 

M (3^..>9-t,v«..r^ pd^ 

Bo^oF  pEXERSON  &  IVERSON^ 


Vig.  1 — Sales  ticket,  3.5x7  iiichcs,  showing  also  folder  in 

whitii  each  customer's  tickets  are  kept  for  current 

month.     Name  on  jacket  flap  shows  poorly. 

24 


day's  work  is  condensed  into  a  brief  record  of  the  re- 
sults. Journal  entries  are  double  entry  with  a  single 
money  column,  the  amounts  being  posted  separately  to 
both  debit  and  credit  accounts,  as  indicated  by  the  ex- 
planations. Such  a  form  has  its  merits,  and  among  its 
demerits  is  that  all  the  ledger  accounts  except  casli  are 
carried  in  the  ledger  and  require  posting,  which  the 
columnar  journal  form  does  away  with  to  a  considerable 
extent. 

Besides  the  sales  ticket  a  credit  ticket  form  is  used, 
of  commendable  design.  As  shown  by  the  cuts,  tickets 
are  distributed  to  customer's  folder  in  a  vertical  file. 
These  are  used  from  ^hich  to  make  the  statement,  but 
get  on  the  customer 's  ledger  account  by  being  posted 
individually  from  the  daily  statement. 

By  having  two  extra  "total  amount"  columns  on  the 
recapituation  sheet,  one  marked  "charge"  and  the  other 
"cash,"  the  separation  could  be  made  direct  without 
reflguring,  the  total  of  the  two  columns  balancing  the 
total  of  the  merchandise  distribution  columns. 

An  order  form  already  has  been  published,  and  this 
contributor's  form  is  also  offered  for  comparison.  His 
remittance  blank  is  the  fir.st  to  be  published  and  is  of 
excellent  arrangement,  but  might  well  be  a  voucher 
check  to  be  cashed  by  the  pay^ee  and  comt  back  again  as 
a  receipt,  doing  away  with  tile  necessity  of  acknowledg- 
ment. 

Where  the  bookkeeping  task  is  sufficient  to  keep  one 
man  busy  it  is  desirable  that  the  books  bo  so  arranged, 
as  far  as  possible,  that  the  record  of  transactions  be 
completed  as  they  occur,  in  such  form  that  ledger  post- 
ing may  follow.  In  the  form  herewith  submitted  there 
appears  to  be  little  that  can  be  entered,  except  the  jour- 
nal entries  and  the  balances  forward  from  previous  day, 
until  the  day's  business  is  concluded.  Tlie  making  of 
the  daily  statement  is  a  matter  therefore  for  attention 
probably  the  first  thing  the  following  morning.  In  the 
ordinary  lumber  yard,  however,  this  is  an  advantage 
rather  than  otherwise,  as  the  time  required  for  the  books 
is  comparatively  short,  and  no  attention  need  be  given 
them  during  the  busy  hours  except  to  see  that  the  ticket 
record  of  each  transaction  is  properly  made,  leaving  the 
summarizing  to  be  done  at  one  time  as  a  single  task. 

As  the  contributor  says,  his  quantity  columns  carry 
information  as  to  stock  on  hand  by  departments  which 
answer  many  of  the  purposes  of  a  stock  record  by  items; 
but  the  latter  serves  various  purposes  which  the  shorter 
method  does  not,  especially  in  anticipating  and  prevent- 
ing shortages  of  items  in  frequent  dem.and.  To  keep 
the  record  as  herein  shown,  however,  ia  m.uch  better 
than  keeping  none  at  all,  takes  little  time  and  would 
afford  a  basis  for  interesting  tabular  statements  by 
months  for  the  fiscal  year  as  to  quantities  handled  by 
the  different  departments,  average  cost  and  sale  price 
per  quantity  unit  etc. 


Mr.  iTerson  has  adopted  a  very  complete  elassiflcation 
of  merchandise  sales,  but  carries  all  his  expenses  in  a 
single  account,  which  seems  to  be  somewhat  inconsistent. 
An  expense  distribution  sheet  arranged  like  his  sale  dis- 
tribution, and  based  on  the  cash  tickets  through  which 


expenses  are  mostly  taken  care  of,  would  seem  a  de- 
sirable addition  to  the  system  as  described.  As  a  matter 
of  fact,  however,  he  undoubtedly  has  a  much  better 
mental  analysis  of  the  nature  of  his  expenses  than  his 
books  show  on  their  face — though  this  should  be  a  mat- 


ter of  bookkeeping  rather  than  of  mental  process. 

The  use  of  loose  leaf  books,  the  adoption  of  substantial 
loose  covers  for  the  duplicate  ticket  books,  the  generally 
excellent  ai-rangement  of  the  printed  forms  used,  and 
the  complete  supply  of  kinds  of  forms  are  all  indicative 


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25 


of  business  enterprise  and  progressiveness.  The  daily 
summary  form  is  well  adapted  to  a  small  yard — as  for 
instance  in  its  capacity  for  recording  charge  sales— -and 
gives  a  good  summary  of  sales  and  cash  and  condition 
of  accounts  receivable,  but  accounts  payable  are  not 
summarized,  and  in  other  respects  it  does  rot  give  the 
general  condition  of  resource  _  and  liability  accounts 
which  is  always  shown  by  a  properly  designed  synoptic 


PETERSON  &  IVERSON 

BUILIMNG  MATERIALS 


Eaihui  ptiaie  find  . 


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At 


Fig.  5 — Bemittance  blanic,  duplicating  on  plain  manila 
paper.    Size  about  6x8  inches. 

or  columnar  journal,  several  forms  of  which  already  have 
been  shown.  The  chief  advantage  of  the  daily  statement 
form  is  that  it  is  so  arranged  that  it  can  be  duplicated 
in  carbon  in  a  line  branch  yard  for  forwarding  to  the 
main  office,  and  it  has  been  developed  and  is  used  most 
largely  for  that  particular  purpose.  Two  of  the  best 
developments  are  those  of  the  present  contributor  and 
the  one  already  described  by  A.  K.  Grube,  and  the  two 


should  be  compared  to  note  their  distinguishing  differ- 
ences. 


-4    »l.  *>KT«H»0(l. 

Order  No.                                Date 

.  y.  IVKH^OM. 

M """"            1 

Ship  to  PETERSON  &  IVERSON. 

HOUSTON.  MINN. 

How  Ship-i.  M,  &  SI.  P.  R|.          When. 

Lumber  Dealers. 

Terna: 
ret     m   tan 

Am'tt 

rm. 

nn       mua 

Fig.  6 — Order  form  6x10  inches  high,  linen  stock,  dupli- 
cating on  blank  tissue. 


A  Complete  and  Well  Designed  Set  of 
Duplicate  Forms  for  Lineyard  Account- 
ing— Novel  Trial  Balance  Sheet — Spe- 
cial Cash  and  Bank  System — Points  in 
Credit  Carrying. 

.  This  article  describes  a  newly  developed  lineyard  sys- 
tem in  which  novelty  of  design  and  excellent  printing  of 
forms   are   prominent: 

A   SPECIALIZED   LINEYARD    SYSTEM. 

We  have  had  our  troubles,  but  are  now  over  them,  so 
far  as  our  books  are  concerned,  and  are  only  too  glad  to 
offer  what  suggestions  we  can  to  those  who  are  strug- 
gling with  the  proposition. 

While  we  are  a  lineyard  company  and  keep  a  duplicate 
set  of  books  at  the  general  ofBce,  we  believe  that  we 
have  evolved  a  system  that  is  complete  and  satisfactory 
in  all  its  details  and  one  that  can  be  applied  to  any  re- 


tail yard,  at  least  we  find  it  so,  and  besides  it  is  so 
simple  that  anyone  with  ordinary  business  intelligence, 
whether  he  be  bookkeeper  or  not,  can  understand  it.  It 
requires  but  a  small  clerical  force  and  our  yard  managers 
do  not  spend  more  than  one  hour  each  day  on  their 
books.  In  one  of  our  yards  doing  a  busine.ss  of  better 
than  $200,000  a  year,  we  have  but  one  bookkeeper,  who 
also  makes  the  itemized  bills  and  acts  as  cashier,  and 
he  finds  ample  time  to  do  ail  this  in  nine  hours,  and 
no  night  work. 

One  of  our  lady  bookkeepers  in  the  general  office  keeps 
duplicate  sets  for  three   yards  that  do  a  collective  busi- 


•s 

1 
1 

1 

Ho.    C 

Din¥ir  to 

Omit  to. 

6500      0. 1 

1 

II 

-  i 

BMitr,  C«»..-.- 

-•- -I»l.._ 

St 

r  ■ 

,    ^ 

•>•  S 

-— 

=  a 

:^« 

X 

I 

1 

Fig.  1.    Delivery  ticket,  4x6.5  inches  wide,  duplicate. 

ness  of  about  $20,000  a  month,  and  takes  only  about  three 
hours  each  day,  which  includes  the  time  spent  on  check- 
ing extensions  etc.,  and  all  trial  balances  are  out  by 
the  second  day  of  each  month.  We  use  the  following 
forms: 

Duplicate  Order  Tickets  (Fig.  1). 

Triplicate  Sales  Tickets  (Fig.  2).      • 

Duplicate  Bill  Book. 

Cash  Book  and  Journal,   with  columns  to  cover 


4. — Recapitulation  of  merchandise  sales  by  fifteen  departments,  occupying  back  of  loose  leaf  sheet  shown  in  Fig.  S,  and  running   across  the  wide  way  of  page,  16.5  inches. 
Distribution  is  both  by  quantities  and  by  money  amounts,  and  both  are  posted  to  merchandise  accounts  in  ledger. 

26 


THE  HALLACK  LU«BER  AMD  SUPPLY  CO. 

N.     B        2951 

Hold  to 

t 

Qi—i. 

«ATein*L 

fHt 

TMt 

^ 

1 

• 

' 

' 

1 

Fig.  2.     Sales  ticket  or  invoice,  triplicate,  i.75x7.5  inches 
wide,  copies  punched  for  hinder. 

departments   (Figs.  3  and  4). 
Ledger. 

The  duplicate  order  book  Is  kept  for  all  orders  taken 
In  office,  and  teams  are  loaded  from  them.  From  this 
it  is  entered  after  loading  into  the  triplicate  sales  book, 
and  the  load  is  checked  oft  from  this,  original  and  trip- 
licate to  go  with  the  delivery;  the  original  being  signed, 
returned  and  filed,  triplicate  being  left  for  the  customers. 
The  duplicate  Is  never  removed  from  the  book,  and  these 
books  are  filed  under  dates  and  numbers.  Cash  sales 
tickets  are  itemized  in  same  book  so  marked,  the  orig- 
inal put  In  cash  drawer  to  check  cash  sales,  triplicate 
given  to  customer  for  receipt.  Extensions  and  prices 
are  made  on  the  duplicate  slips.  Bookkeeper  then  lists 
all  sales,  both  cash  and  credit,  numerically,  separating 
under  different  columns  where  departments  are  desired. 
(We  keep  this  numerical  list  on  the  reverse  side  of  the 
cash  book  journal,  but  It  may  be  kept  In  a  regular  sales 
book  If  so  desired.) 

He  then  bills  all  charges  Into  the  duplicate  bill  book, 
checking  off  each  charge,  both  numerically  and  as  to 
amount,  from  his  list,  and  noting  ticket  number  oppo- 
site each  entry  for  future  reference.  About  the  twenty- 
fifth  day  of  each  month,   he  devotes  his  spare  time  to 


bringing  down  his  footings  on  the  bills,  so  that  on  the 
last  day  he  only  has  to  bring  down  the  total  and  carry 
forward  balances  from  ledger  to  get  out  his  statements. 

On  the  morning  of  the  first  day  of  each  month  he  posts 
the  totals  from  his  bill  book  into  the  ledger.  He  then 
proves  the  totals  from  his  daily  sales  list  by  the  totals 
of  his  bill  book.  He  then  posts  his  sales  to  his  sales 
account  on  the  ledger,  also  the  footings  of  his  cashbook 
journal  and  Is  then  prepared  to  take  his  balance.  By 
the  double  dally  check  little  trouble  ever  Is  experienced 
in  arriving  at  a  balance. 

In  the  cashbook -journal  Is  kept  all  cash  transactions 
and  is  divided  under  various  heads,  such  as  general  mer- 
chandise, coal.  Interest,  labor,  expense  etc.  to  meet  lo- 
cal requirements  and  is  balanced  each  day. 

Our  experience  with  many  systems  In  previous  years 
has   proved   to   us   that   the   foregoing   is  highly  satlsfac- 


r>ATi 

No. 

»„c..«„.. 

Co*L 

Credit* 

/^UA 

/ 

t/^Cf 

'  y.i-^ 

.S-c  ^ 

kL 

}^ 

\S~o  /   _ 

y^ 

^l/c 

^ J 

— J 

' 

V..- 

' 

^ 

J—J 

•^ 

Fig.   4.     Distribution  form   on   back  of  Fig.   S.     Figure 
shows  one-half  which  is  repeated  in  other  half  of  page. 

tory  as  to  both  simplicity  and  ability  to  arrive  at  the 
condition  of  business.  We  will  be  pleased  to  furnish  you 
subscriber's  blanks  and  detailed  Information,  if  It  will 
In  any  way  be  of  assistance. 

M.  P.  Anthony, 
Hallock  Lumber  &  Supply  Co. 

EDITOBIAIi  DISCUSSION. 

While,  as  the  contributor  says,  this  system  could  be 
used  for  a  single  yard,  it  is  essentially  a  specially  de- 
veloped lineyard  system,  its  strong  feature  being  the 
complete  set  of  tickets  and  daily  statements  arranged 
for  duplication  to  general  office.  The  cash  account  is 
really  kept  on  the  daily  cash  statement  (Fig.  5),  and 
there  are  no  cash  columns  on  the  "Cashbook  and  Jour- 
nal." The  balance  on-the  daily  cash  statement  is  veri- 
fied by  the  cash  balance  statement    (Fig.  10),  showing 


o            o 

CASH  RECEIPTS  AND  DISBURSEMENTS 

V.rH.          19 

NO. 

BALANCE 

V— >- 

— ^'A.,'-'''^'""- ' ' 

L 

1 

V""" 

^^ 

OEPOSrTEO 


Fig,  5.     Daily  cash  statement,  blue,  4.5x7  inches  high, 
duplicate;  binder  holes  at  top. 

amounts  on  hand  of  each  denomination  and  a  list  of  the 
checks;  the  detailed  bank  account  is  shown  on  Fig.  6 
daily,  and  these  with  duplicate  sales  tickets  and  delivery 
tickets  carry  to  the  general  office  a  complete  history  of 
the  day's  transactions,  from  which  the  accountant  there 
can  write  up  the  accounts  for  that  branch  yard.  At  the 
branch  yard  office  the  only  main  books  kept  are  the 
"Cashbook- Journal,"  (Fig.  3)  and  a  small  ledger  (the 
exact  form  being  shown  in  Mr.  Shaw's  article,  printed 
April  29).  Fig.  3  evidently  is  not  duplicated  to  the  home 
office,  but  the  monthly  trial  balance  is,  on  an  extremely 
clever  special  form   (Fig.  8). 

As  already  pointed  out,  Fig.  3  form  has  no  cash 
columns.  All  the  contra  entries  appear  here,  however,  and 
so  indicate  cash  by  omission.  That  is,  the  book  is  al- 
ways out  of  balance  by  the  amount  of  cash  on  hand,  and 
it  and  the  balance  of  the  daily  cash  statement  together 
will  furnish  a  complete  balance.  Just  what  "Sundry" 
means  in  the  columns  is  not  clear,  unless  "Sundry 
Merchandise, ' '  as  ledger  items  go  into  ' '  General ' '  col- 
umns. The  reverse  form  (Fig.  4)  affords  a  distribution 
sheet  of  the  same  plan  as  that  already  shown  by  Mr. 
Iverson,  but  he  distributed  sales  to  a  considerable  num- 


'(yP^^'Tb^- 


Fig.  S.    Cashbook  form,  11x16.5  inches  wide,  with  S-inch  loose-leaf  margin. 

27 


ber  of  merchandise  departments,  instead  of  only  lum- 
ber and  coal,  and  in  each  carried  quantities  as  well  as 
amounts.  The  contributor  notes  on  the  form  that  this 
distribution  is  done  direct  on  an  adding  machine,  where 
one  is  used,  on  a  sheet  taking  as  many  figure  columns 
as  may  be  needed. 

The  three  daily  forms  referred  to  fit  the  same  binder 
and  are  printed  on  stock  of  distinguishing  colors.  De- 
livery tickets  are  provided,  with  columns  to  indicate 
amounts  delivered  and  amounts  "Back  Ordered"  (re- 
served for  future  delivery,  usually  because  out  of  stock). 
Both  the  delivery  and  the  sales  ticket  (Fig.  2)  are  ma- 
chine numbered  consecutively  on  original  and  copies. 
What  the  contributor  refers  to  as  the  duplicate  bill  book  is 
evidently  the  book  of  current  monthly  statements  (no  form 
sent),  which  are  kept  posted  so  that  they  are  practically 
complete  and  ready  for  mailing  at  the  end  of  the  month. 
The  distribution  sheet  (Fig.  4)  carries  merchandise  total 
sales  until  the  end  of  the  month,  when  they  are  posted  to 
the  merchandise  accounts  in  the  ledger. 

Referring  to  Fig.  8,  the  first  month's  trial  balance  is 
made  on  the  narrow  sheet  with  printed  headings  and 
line  numbers  for  accounts,  punched  for  loose-leaf  binder 
and  printed  one  side  only  for  carbon  duplication  to  gen- 
eral oflBce.  The  sheet  for  the  next  month  goes  directly 
underneath  and  is  wider  to  the  extent  that  the  money 
columns  project.  Without  rewriting  the  accounts,  there- 
fore, the  new  amounts  can  be  extended  opposite,  and  any 
new  accounts  added.     The  next  month's  sheets  are  still 


o 

BANK 

o 

Y»rH. 

1<1 

NO. 

BALANCE 

DEPOSITED 


Fig.  6.    Daily  bank  statement,  duplicate;  same  size  as 
Fig.  5,  yellow. 


wider,  and  so  on  for  six  months,  when  the  list  is  started 
over  again  on  the  first  form  of  sheets.  The  loose-leaf 
binder  is,  of  course,  made  to  take  the  widest  sheet.  It 
is  really  the  usual  short  page  trial  balance  form  cleverly 
redesigned  to  allow  monthly  duplication  to  the  general 
office  without  any  additional  writing  being  required. 

The  daily  cash  statement  takes  cash  sales  as  one 
item  from  the  sales  tickets,  and  cash  received  on  account 
as  one  item   from  the  column  of  the  distribution  sheet. 


Petty  cash  items  are  put  directly  on  the  statement.  As 
stated  before,  it  is  really  the  original  cash  record,  ami 
entry  of  contra  amounts  in  the  journal  may  be  made  at 
leisure. 

Fig.  7  is  a  semiannual  form  for  listing  accounts  due. 
These  are,  of  course,  shown  on  the  monthly  trial  balances, 
but  the  idea  here  is  to  keep  track  of  these  particular 
accounts  and  trace  them,  month  by  month  until  closed 
out.     After  six  months  a  new  list  is  made,  those  carried 


Porm  6— 2-Oy— 2m 


LIST  OF  NOTES  AND  ACCOUNTS 


YARD 


190 


Fiff.  7.     List  of  notes  and  accounts,  8.5x11  inches  high;  runs  six  months  before  rewriting. 


Fig.  8.     Trial  balance  sheets,  loose-leaf,  16.5  inches  high,    first  sheet  6  inches  wide,  sixth  14  inches  wide;  six  suc- 
cessive overlaps,  running  six  months  without  rewriting. 

28 


from  the  old  list  being  marked  in  red  ink.  Collections 
on  these  lists  are  figured  into  percentages  for  the  pur- 
pose of  comparing  the  records  of  the  various  yards,  and 
comparing  also  with  previous  years. 

In  reproducing  this  system  for  single  yard  use  it  might 
be  desirable  to  let  Figs.  5  and  6  be  represented  by  per- 
manent books  of  usual  form,  since  there  would  be  no 
need  of  carbon  duplication;  or  in  place  of  Fig.  5  use 
individual  cash  tickets  for  petty  items,  and  let  other 
cash  go  direct  to  cash  columns  added  to  Fig.  3  form. 
The  forms  are  so  clear  and  simple  as  not  to  require  fur- 
ther explanation  or  comment  other  than  the  reader  may 
make  for  himself.  The  contributor  explains,  however, 
that  in  addition  to  these  duplicate  forms  the  bank  state- 
ment and  vouchers  also  are  forwarded  to  home  ofSce 
with  the  trial  balance,  forming  a  complete  audit  on  the 
branch  office  operation. 


o                    o 

CASH   ON   HAND. 

V.rd.                                                 lAn 

GOLD,             2(k 

\              1l» 

ia 

CUnRENCVMto 

20l 

loa 

6t                    • 

1t«2l 

SILVIR,  1.W 

.SO 

Jt 

.10 

.OS 

TOT,  MONEY 

nEIIIttUCKCa 

_ 

■«— -V- 

r — ^•^" 

^^" 

1 1 

1 ' ~~ 1 

r-^^ 

• 

"X^ 

ON  HAND 

Fiff.  10.    Daily  cash  balance,  same  size  as  Fig.  5,  dupli- 
cate, pink. 


REMITTANCE 

THE  HALLACK  LUMBER  AND  SUPPLY  CO. 

WHOLESALE  AND  RETAJI. 

Dimnr.  Colorado 


WO  RCCCIPT  WECE«>ARY 


Yours  mfy, 

THB  HAUACK  LUMBER  AND  SUPPLY  CO. 


Fig.  9.     'Remittance  form,  7x8.S5  inches  wide. 


An  Indiana  Lumberman's  Painstaking 
Article — Columnar  Journal  or  Daily 
Exhibit  the  Backbone  of  the  System — 
Card  Ledger  Used  —  An  Autograph 
Register  an  Elssential  Feature. 


BOOKKEEPING-  IN  THE  EETAIL  LUMBER  YARD. 

The  question  of  bookkeeping  In  the  retail  lumber  business, 
like  a  few  other  Important  Issues,  Is  looked  upon  by  many  as 
a  matter  o(  secondary  tmportance,  therefore  receiving  little 
or  no  attention.  Yet  when  viewed  In  the  light  of  modern 
business  methods  It  must  be  conceded  that  this  Is  one  of  the 
questions  of  vast  concern  entering  Into  the  successful  opera- 
tion of  a  retail  lumber  yard.  The  modern  business  manager 
Is  not  satisfied  with  knowing  the  fact  of  a  loss  or  a  profit  at 
the  close  of  the  business  year ;  he  desires  to  know  why,  how 
and  where  such  loss  or  gain  was  sustained  so  that  he  will 
be  better  enabled  thereby  to  fortify  his  business  for  the  fu- 
ture. In  order  that  he  may  acquire  that  knowledge  a  certain 
amount  of  detail  will  be  necessary.  I  am  aware  that  the 
matter  of  detail  In  this  line  of  business  has  been  the  subject 
of  articles  appearing  In  some  of  the  leading  lumber  Journals 
of  the  country  and  has  been  adversely  criticised  In  many  In- 
stances, yet  I  still  agree  with  Mr.  Saley  in  his  Indorsement 
of  detail.  Without  It  certain  embarrassing  and  otherwise 
avoidable  errors  are  bound  to  crop  out  here  and  there  which, 
with  the  adoption  of  a  simple  safeguard  system,  could  readily 
be  prevented. 

Of  all  the  reports  which  the  manager  requires  placed  be- 
fore him  In  order  that  he  may  obtain  constantly,  quickly  and 

29 


accurately   a   bird's-eye   view   of   the   business   situation,   the 
most  Important  are  those  relating  to  finances. 

Cash  on  hand  and  collections  are  Important  factors  which 
Indicate  when  bills  may  be  paid  and  cash  discounts  saved. 
It  is  customary,  therefore,  In  all  well  regulated  business 
operations,  to  draw  up  a  monthly  statement  of  accounts  re- 
ceivable immediately  following  the  first  of  each  month.  In 
order  to  do  this  correctly  it  is  necessary  to  have  some  es- 
tablished method  of  keeping  a  complete  record  of  accounts. 
The  double  entry  system  of  bookkeeping  Is  the  best  adapted 
and  most  satisfactory  for  this  purpose.  I  shall  take  this 
matter  up  under  the  following  heads  : 

(1)  Daybook 

(2)  Cashbook 

(3)  Journal 

(4)  Ledger. 

Since  the  Daybook  Is  the  basis  of  all  other  records  it  is 
evident  that  on  the  making  of  this  record  will  hang  the  ac- 
curacy of  all  the  other  records  entering  Into  the  complete  set 
of  books. 

The  most  valuable  sort  of  Daybook  that  can  be  deylsed  Is 
one  which  may  be  obtained  and  built  up  from  carbon  copies 


HENDRICKSON    BRO'S   & 

DEALERS  IN 

LUMBER,   LATH.  SHINGLES 
HARD    AND  SOFT    COAL. 

MR.                  Uir^     dj  (n/ 

CO. 

^         ^/O    P,J^   ^t 

NO. 

Rochester.  Ind              (^-OAa-C         |              iqi  1 

^o«. 

— 1 

OIMKN8ION 

rIKT 

f>fllCC 

% 

CT8. 

rnoA 

( 

x/fcXfvvvx-vU     fll^cL 

II 

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3  Xiv^     TM"    OraJL 

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t-1 

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00 

fi^c^cJL. 

1 

r-r 

Fig. 


1.     Sales  ticket  form,  showing  how  it  m  also  used 
for  a  monthly  statement.    Siee  5x6  inches. 


of  all  bills  or  invoices  and  receipts  glyen  to  customers  dur- 
ing the  course  of  the  day's  business.  It  should  be  a  recog- 
nized fact  that  such  a  bill  or  invoice  should  be  made  for 
each  sale  and  a  receipt  given  for  each  payment  on  account 
or  for  lumber  returned.  It  not  only  will  protect  the  cus- 
tomer but  will  be  a  safeguard  to  the  dealer.  As  a  mechanical 
device  for  the  handling  of  such  tickets  an  autograph  reg- 
ister is  very  economical  but  not  absolutely  essential  In  the 
installation  of  such  a  system.  The  local  printer  can  print, 
number  and  bind  Into  pads  these  tickets  at  a  nominal  price, 
using,  for  Instance,  white  paper  for  the  original  and  buft 
for  the  duplicate.  The  same  tickets  are  used  for  receipts  by 
scratching  out  the  "Sold  to,"  and  inserting  "Received  of," 
preceding  the  customer's  name.  The  entry  for  credit  will 
occupy  the  body  of  the  ticket  and  receipt  by  the  usual  sig- 
nature of  the  firm's  name  below. 

The  carbon  copies  of  these  tickets  are  retained  on  the  file 
peg  in  the  office  and  at  the  close  of  the  day's  business  are 
arranged  in  numerical  order  and  properly  entered :  the  sales 
tickets  Into  the  sales  record  and  the  reclpts  into  the  Journal. 
The  tickets  are  now  ready  to  be  placed  on  the  file  for  that 
purpose.  At  the  close  of  the  month  they  may  be  removed 
from  this  monthly  file  and  placed  Into  the  transfer  file  and 
there  retained  for  future  reference.  Hence  you  have  built 
up  a  daybook  that  no  customer  can  gainsay. 

The  monthly  statements  are  also  made  up  on  these  tickets. 
If  they  are  to  be  mailed  the  carbon  copies  are  retained  in  the 
ofllce  with  proper  notation  as  to  date  of  mailing,  etc.,  or  it 
the  accounts  are  handled  by  a  collector,  instead,  he  has  car- 
bon copies  of  all  receipts  for  the  day's  work,  with  proper  no- 
tation of  partial  payments,  promises,  removals,  and  any 
other  information  which  he  may  deem  useful  to  the  man- 
ager In  the  operation  of  accounts  with  that  customer  In  the 
future.  The  carbon  copies  returned  by  the  collector  or  re- 
tained from  statements  mailed  are  placed  into  the  tickler, 
which  the  manager  refers  to  daily,  enabling  him  to  make 
good  these  promises,  etc.,  as  they  shall  fall  due. 

The  Cashbook  and  Journal  I  shall  take  up  together  since  I 
have  combined  them  into  one  record,  which,  for  convenience, 
I  will  name  the  dally  exhibit,  and  will  hereafter  refer  to  it 
as  such.  An  ordinary  double  entry  10-column  Journal  is 
used  for  this  record.  The  idea  of  using  a  10-column  book  for 
this  record  Is  for  the  purpose  of  sectlonallzing  the  accounts, 
the  value  of  which  will  be  more  readily  appreciated  when  we 
speak  of  the  ledger.  A  comprehensive  view  of  these  ten 
columns  will  be  as  follows : 

(a)  Accounts  receivable 

(b)  Accounts  payable 

(c)  Private  accounts. 

(d)  Cash  account 

(e)  Bank  account. 

The  accounts  receivable  are  accounts  with  your  customers 
and  here  occupy  the  first  two  columns  of  the  dally  exhibit, 
as  debit  and  credit  Items  respectively.  In  order  to  amplify 
the  information  of  the  manager  I  have  added  another  book 


tc  this  section  which  I  will  name  the  sales  record.  Besides 
saving  space  in  the  dally  exhibit  It  saves  time  In  posting  to 
the  ledger.  ITie  sales  record  contains  a  number  of  columns 
depending  upon  the  several  divisions  the  manager  desires  to 
make  in  the  merchandise  account.  The  value  of  these  col- 
umns will  be  taken  up  later  under  the  head  of  private  ac- 
counts. 

The  dally  sales  are  entered  into  the  sales  record  from  the 
sales  tickets  as  has  been  previously  referred  to,  while  the 
credits  are  entered  directly  into,  the  accounts  receivable  sec- 
tion of  the  daily  exhibit.  The  items  in  this  section  of  the 
dally  exhibit  are  posted  dally  to  the  ledger,  which  will  be 
referred  to  later. 

l"he  accounts  payable  are  the  purchase  accounts  and  occupy 
the  second  pair  of  columns  of  the  dally  exhibit.  For  the  same 
purpose  as  referred  to  above  I  have  added  another  book  to 
this  section  of  the  dally  exhibit  which  I  will  name  the  pur- 
chase record,  similar  in  form  to  the  sales  record.  All  the 
purchases  are  entered  from  Invoices  rendered  to  you  and 
posted  from  there  Into  the  proper  section  of  the  ledger.  The 
debit  purchase  accounts  are  entered  directly  into  the  ac- 
counts payable  section  of  the  dally  exhibit  and  from  there 
posted  to  the  proper  section  of  the  ledger. 

Private  accounts  are  such  as  capital  stock,  bills  receivable 
and  payable,  buildings,  real  estate,  equipment,  cash,  banks, 
merchandise,  office  and  miscellaneous  supplies,  expense  etc. 
The  third  pair  of  columns  of  the  dally  exhibit  are  used  for 
this  account.  All  the  Items  In  this  section  except  the  mer- 
chandise accounts  are  entered  dally  in  these  columns  and 
posted  to  the  proper  section  of  the  ledger.  The  merchandise 
accounts  are  posted  monthly  from  the  footings  of  the  several 
columns  of  the  sales  record  and  the  purchase  record.  These 
two  books  as  referred  to  above  may  have  any  number  of 
columns  governed  by  the  divisions  desired  In  the  merchan- 
dise account.  On  the  left  hand  side  of  each  of  these  books 
is  the  usual  space  for  the  date,  customer's  name  and  ticket 
or  Invoice  number  as  the  case  may  be.  The  divisions  may 
be  similar  to  the  following :  Total  sales,  coal,  lumber, 
shingles,  lath,  doors  and  windows,  hardware,  roofing,  brick, 
posts,  molding,  etc.  Much  time  is  saved  since  these  are 
footed  and  posted  only  at  the  close  of  the  month  instead  of 
posting  the  items  dally,  as  would  be  necessary  had  they  been 
entered  directly  into  the  dally  exhibit. 

•  At  the  same  time  that  the  footings  of  the  merchandise 
accounts  are  entered  in  the  private  accounts  column  of  the 
dally  exhibit  the  total  column  of  the  sales  record  may  be 
entered  to  the  debit  column  of  the  accounts  receivable  and 
the  total  column  of  the  purchase  record  to  the  credit  column 
of  the  accounts  payable  of  the  dally  exhibit.  This  is  ob- 
viously for  the  purpose  of  balancing  the  ledger  entries. 

The  cash  accounts  are  those  representing  receipts  or  dis- 
bursements of  cash  for  any  purpose.  They  occupy  the  fourth 
pair  of  columns  of  the  dally  exhibit.  The  items  of  this  ac- 
count are  not  posted  to  the  ledger.  The  columns  in  this  sec- 
tion are  footed  at  the  close  of  the  month  and  the  balance  en- 

-      30 


tered  into  the  private  accounts  section  and  from  there  posted 
to  the  ledger. 

The  bank  accounts  occupy  the  last  pair  of  columns  of  the 
daily  exhibit  and  are  treated  similarly  to  the  cash  accounts 
section.  After  these  sections  have  all  been  posted  to  the 
ledger  you  are  ready  to  take  off  the  trial  balance. 

The  ledger  Is  the  most  Important  record  In  the  complete 
set,  and  after  several  years'  experience  with  solid-bound, 
loose-leaf  and  later  with  the  card  ledger,  I  have  found  that 
the  great  simplicity,  economy,  and  work-saving  features  of 
the  card  ledger  appeal  not  only  to  the  bookkeeper  but  com- 
mend themselves  favorably  to  every  member  of  the  office 
force.  It  is  certainly  here  to  stay  and  can  readily  be  in- 
stalled in  any  retail  lumber  business  without  disturbing  the 
present   system   of   accounting   but    rather    will   simplify   It. 

So  much  depends  upon  the  ability  to  secure  the  flrst-of-the- 
month  statement  of  accounts  receivable  quickly  and  accu- 
rately that  a  card  ledger  would  be  well  worth  the  installation 
if  for  no  other  reason  than  that  checking,  posting,  the  taking 
of  trial  balances  and  making  up  of  statements  are  so  greatly 
simplified.  Prompt  statements  mean  more  prompt  collections. 
The  card  ledger  falls  into  three  sections  : 

(1)  Accounts  receivable 

(2)  Accounts  payable. 

(3)  Private  accounts. 

The  accounts  receivable  portion  of  the  card  ledger  Is  di- 
vided into  two  classes — open  and  closed  accounts.  The 
bookkeeper's  work  is  simplified  at  the  start  because  he 
handles  nothing  but  live  records.  Two  sets  of  indexes  or 
guides  are  used,  one  for  open  and  one  for  closed  accounts. 
When  an  entry  is  posted  to  an  open  account,  which  closes  it, 
the  card  instead  of  being  retwned  to  the  open  account  sec- 
tion of  the  drawer  Is  placed  In  the  closed  accounts  file ;  so 
that  in  making  the  trial  bal.mce  and  monthly  statements 
every  record  in  the  open  accounts  enters  into  It. 

The  accounts  payable  section  of  the  card  ledger  has  a  set 
of  Indexes  or  guides  of  different  color  so  as  to  readily  dls-  • 
tingulsh  it  from  other  sections.     The   private  accounts  sec- 
tion  of   the   card  ledger  has   a   set  of  indexes  or  guides  of 
still  a  different  color. 

It  is  now  obvious  that  the  trial  balance  will  be  taken  off 
in  three  sections  representing  the  three  divisions  of  the  card 
ledger,  each  complete  within  itself.  An  error  can  readily 
be  located  as  to  section,  thus  saving  much  time  in  checking. 

On  account  of  limited  room  In  the  safe  we  found  it  neces- 
sary to  use  a  4x6  card  for  our  card  ledger.  The  cost  Is  much 
less  than  the  larger  size  and  It  is  sufficiently  lajge  tor  any 
ordinary  purpose.  I  would  not  now  adopt  the  6x8  card 
even  If  the  safe  space  did  permit. 

The  system  of  bookkeeping  outlined  herein  may  from  an 
external  viewpoint  seem  Intricate,  but  when  looked  at  from 
the  Inside  it  is  very  simple  and  easily  applied  to  the  retail 
lumber  .business. 

O.  M.  Hendbickson,  Hendrickson  Bros.  &  Co. 

Rochester,  Ind. 


EBITOBIAL  DISCUSSION. 

The  contributor  is  correct  in  describing  this  as  a 
simple  and  easily  worked  system.  Certainly  it  can 
not  be  considered  complicated  as  compared  with  some 
of  the  more  highly  developed  ones  that  have  been  de- 
scribed. There  are,  however,  one  or  two  points  in  the 
working  of  it  that  are  a  little  obscure  in  the  descrip- 
tion, but  which  are  evident  from  a  closer  study,  of 
the  article. 

Since  a  merchandise  classification  is  described  and 
there  is  no  provision  of  columns  for  it  in  the  "daily 
exhibit,"  it  is  eviden^t  that  the  salesbook  is  intended 
to  take  care  of  all  sales,  both  cash  and  charge.  Its 
merchandise  columns  at  the  end  of  the  month  show 
the  total  credits  to  merchandise  for  the  month's  sales. 
The  charge  sales  are  charged  to  customers'  ledger  ac- 
counts direct  from  the  salesbook,  and  also  must  in  some 
way  go  to  accounts  receivable  column  in  the  daily 
exhibit,  in  order  that  that  column  may  balance  the 
customers'  section  of  the  ledger,  which  it  controls.  It 
is  presumed  this  is  carried  on  the  salesbook  in  a 
charge  column  and  posted  at  the  end  of  the  month  at 
the  same  time  merchandise  is  credited.  It  is  evident, 
however,  that  the  cash  columns  in  the  daily  exhibit 
should  receive  the  cash  from  daily  cash  sales,  prob- 
ably as  a  total  for  the  day  from  the  salesbook,  but 
the  contramerchandise  credits  do  not  come  into  that 
book  until  the  end  of  the  month,  and  meanwhile 
would  be  left  out  of  balance. 

It  is  understood  that  there  is  no  general  merchan- 
dise account  in  the  ledger,  but  that  this  is  represented 
by  separate  accounts  for  each  class  of  merchandise 
carried  upon  the  sales  and  purchase  records.  The 
daily  entries  of  cash  sales  could  be  balanced  by  a 
credit  entry  to  merchandise  in  the  private  accounts 
column,  to  be  posted  to  a  special  merchandise  cash 
sales  account  in  the  ledger.  Then  when  the  classified 
merchandise  credits  were  posted  from  the  salesbook 
at  the  end  of  the  month,  and  the  contracharge  to  ac- 
counts receivable,  an  additional  contracharge  would 
be  made  to  merchandise  cash  sales,  balancing  the  class 
merchandise  credits  iiv  the  daily  exhibit,  and  when 
posted  balancing  out  the  merchandise  cash  sales,  which 
is  thus  a  temporary  or  suspense  account.  The  usual 
way,  however,  is  to  have  two  additional  merchandise 
columns  in  the  daily  exhibit,  and  use  this  to  take  daily 
credits  against  cash  and  accounts  receivable  columns, 
for  daily  postings  of  the  sales  footings  from  the  sales- 


book.  This  would  be  a  controlling  account,  equal  at 
all  times  to  the  total  merchandise  columns  of  the 
salesbook,  which  total  would  be  accumulated  until 
the  end  of  the  month  and  posted  to  the  ledger.  The 
journal  merchandise  column  would  then  be  closed  over 
into  the  private  accounts  column,  which  would  then- 
balance  with  that  section  of  the  ledger  in  which  the 
classified  merchandise  accounts  are  contained.  This  is 
carrying  out  the  contributor's  excellent  sectionalizing 
plan  by  adding  a  monthly  subsection  to  private  ac- 
counts for  the  purpose  of  showing  the  total  merchan- 
dise sales  daily  and  aggregate,  balancing  with  the 
similar  figures  of  the  salesbook  divided  as  to  merchan- 
dise departments.  The  purchase  record  as  here  de- 
scribed has  the  same  merchandise  columns  as  the  sales 
record,  and  is  a  logical  development. 

If  all  accounts  to  be  paid  by  check  are  first  put  into 
accounts  payable,  bank  credits  will  all  charge  to  that 


c;?^ 


Fig.  e.    Form  for  ledger  card  4x6  inches. 


one  account  and  it  is  possible,  therefore,  to  take  the 
bank  column  oflf  the  daily  exhibit  entirely  and  make 
it  subsidiary  to  the  cash  columns  there.  The  cash 
balance  could  include  both  cash  in  drawer  and  in 
bank.  In  the  bank  register  deposits  would  be  entered, 
and  checks  would  be  entered  and  totaled  for  the  week  or 
month  and  the  total  of  checks  entered  in  the  daily  exhibit 
as  a  charge  to  accounts  payable  and  credit  to  cash, 
^n  extra  column  on  the  bank  register  shows  the  run- 
ning balance  in  bank;  but  in  balancing  the  daily  cash, 
the  cash  in  drawer  would  be  added  to  the  bank  bal- 
ance at  the  time  the  checks  were  last  totaled  into  the 
daily  exhibit,  not  taking  account  of  checks  issued 
later.  This  plan  relieves  the  daily  exhibit  of  these 
entries,  and  it,  of  course,  does  not  fill  up  so  fast.  The 
charges  to  accounts  payable  are  posted  direct  to 
ledger  accounts  payable,  and,  in  fact,  bank  is  here 
specialized  in  exactly  the  same  manner  that  the  con- 
tributor has  specialized  his  sales  and  purchase  records. 

31 


In  preference  to  the  plan  as  above  described,  however, 
the  reviewer  would  prefer  to  retain  the  bank  columns 
in  daily  exhibit  and  handle  bank  separate  from  cash, 
but  still  use  the  bank  register  for  details  and  posting, 
bringing  only  daily  or  weekly  totals  into  the  daily 
exhibit  bank  column  and  figuring  a  running  balance 
on  the  bank  register  to  show  amount  in  bank  at  all 
times. 

This  is  the  first  article  to  be  published  in  which  a 
preference  is  shown  for  the  card  ledger  instead  of 
book  ledgers;  but  this  form  is  widely  used  and  has 
strong  advocates.  It  is  a  matter  of  individual  prefer- 
ence. A  loose-leaf  book  will  hold  greater  writing 
area  and  more  pages  in  the  same  cubical  space,  be- 
cause paper  is  thinner  than  cardboard;  but  if  the  use 
requires  removal,  and  especially  for  typewritten  rec- 
ords, the  card  index  has  the  advantage,  and  there  are 
other  points  of  difference. 

The  columnar  journal  plan  as  described  by  this  con- 
tributor divides  the  ledger  into  three  sections  and 
takes  the  original  entries,  except  sales  and  purchases, 
for  which  separate  original  entry  books  are  provided. 
Usually  it  is  expanded  by  the  provision  of  more  col- 
umns, further  subdividing  the  private  accounts  column 
of  his  form  and  providing  additional  original  records 
for  bank  and  voucher  system  and  for  petty  cash,  so 
that  the  transactions  come  into  the  journal  in  con- 
densed form.  Just  how  far  this  may  be  carried  is  a 
matter  of  individual  judgment;  it  is  evident,  however, 
that  Mr.  Hendrickson's  plan  is  very  logically  and 
neatly  developed  to  the  extent  which  has  commended 
itself  to  him  and  offers  considerable  advantages  over 
the  old  method  centering  in  the  bound  daybook  and 
2-column  journal.  Like  many  others  submitted,  it  is 
stronger  in  distribution  of  merchandise  than  in  analy- 
sis and  subdivision  of  expenses. 

The  contributor  speaks  of  using  the  sales  ticket 
form  for  the  monthly  statement  also,  and  Fig.  1  shows 
a  statement  made  on  this  form.  The  ticket  is  of 
liberal  size,  well  printed  on  heavy  paper,  and  with  its 
uniform  copperplate  gothic  type  is  a  fine  example  of 
business  printing.  Nevertheless,  in  most  cases,  it  is 
considered  a  good  investment  to  have  a  distinct  and 
larger  form  for  the  monthly  statement,  one  which  will 
impress  upon  the  customer  that  it  is  the  statement  on 
which  settlement  is  to  be  made.  Pig.  2  shows  the 
ledger  card  in  stock  ruling,  no  printed  heading,  which 
costs  money  and  is  unnecessary.  The  back  also  is 
ruled  for  continuation  of  the  account  when  front  is 
filled.  The  balance  column  is  a  good  feature  some- 
times omitted  from  narrow  ledger  ruling.  No  cut  of 
the  columnar  journal  form  is  given,  the  description 
of  the  text  being  suflSciently  explanatory. 


Typewriter  Invoicing  in  Duplicate — Sales 
Kept  by  Departments — Expense  Dis- 
tributed Direct  on  Merchandise  Depart- 
ments Where  Possible,  Balance  Pro- 
rated at  End  of  the  Month. 


SySTEM  OF  ACCOUNTS  IN  AN  ARKANSAS  YAED. 

For  entry  In  your  bookkeeping  contest,  I  submit  the  fol- 
lowing description  of  my  system,  which  has  been  gradually 
boJlt  up  by  a  process  of  evolution. 

That  I  may  have  complete  Insight  Into  all  the  details  of 
the  business  I  have  divided  It  into  six  departments,  as 
follows : 

Department  A,  Includes  lumber  of  all  kinds ; 
Department  B,  Includes    sash,    doors,    moldings,    columns 
etc. ; 

Department  C,  Includes  shingles  and  roofing  and  building 
paper ; 

Department  D,  includes  hardware,  paint  and  glass ; 

Department  E,  includes  brick,  lime,  cement,  plaster,  sewer 
pipe  etc. ; 

Department  F,  Includes  all  items  of  delivery. 

Every  sale  calls  for  a  bill,  and  for  this  purpose  I  have 
•dopted  a  billing  and  charging  system.  These  bills  (Fig.  1) 
■re  made  in  duplicate — the  original  being  delivered  to  the 
customer  at  the  same  time  with  the  goods  or  as  soon  there- 
after as  possible,  while  the  duplicate  (after  being  entered  on 
the  sales  book)  is  filed  in  a  loose  leaf  binder  In  our  office 
unrter  the  customer's  name.  Opposite  each  item  of  the  bill 
(OB  the  duplicate)  I  indicate  by  the  department  letter  which 
denertment  should  have  credit  for  this  particular  item.  For 
oopvenlence  these  bills  are  numbered  consecutively,  original 
•i>4  duplicate  being  numbered  the  same.  From  these  dupli- 
cate bills  the  entries  are  made  In  the  sales  book  (Fig.  2). 
Here  the  customer's  name  is  entered  for  his  debit  and  the 
amount  of  the  sale  that  comes  from  each  department  is 
carried  to  Its  particular  column.  As  the  bill  numbers  are 
entered  In  regular  consecutive  order,  when  one  has  been 
mislaid  its  absence  at  once  becomes  apparent,  and  thus  a 
ch^k  Is  given  against  losing  any  charges. 

When  all  the  bills  for  the  day  have  been  entered  I  make 
•  dally  trial  balance,  and  on  this  dally  trial  balance  the 
aeblts  must  balance  the  credits.  Each  customer  Is  debited 
the  amount  of  all  the  items  opposite  his  name  in  the  sales 
book  in  a  horizontal  row,  and  each,  department  Is  credited 
the  amount  of  the  Items  In  a  vertical  row  in  Its  particular 
column.  This  dally  trial  balance  reveals  any  mistake  that  I 
may  have  made  during  the  day,  and  when  I  have  It  correctly 
balanced,  I  post  In  the  usual  way  from  It  directly  to  a  loose- 
leaf  ledger  In  which  each  customer  has  a  page  and  each  de- 
partment has  Its  page  also.     It  Is  obvious   that  my   ledger 


COTTER  LUMBER  COMPANY 

COTTtK.  •tKHANSAk 

CLAReNCE  E   HOPKINS.    PROPRIETOR 
lour  3»lt.B  SIIINumbm       1684 


ZO-UIE.IO  iz  se9 
104  M  Cob.  wUa 

3  window!   L0xl2   ■  e  Lt . 

1   roll  dsadonltjg  fall,  ; 

e  Mck«  cooen'  -lii 

Jfnttmtf 


«^ 


a««ra4  Ml  D«jr  Book 


Fig.  1.    Sales  invoice  about  5x8  inches  wide, 
punched  for  binder  duplicating. 

must  be  In  balance  If  I  have  made  no  error  In  posting  to  It 
from  my  dally  trial  balance.  By  proving  my  posting  by 
checking  it  over  my  books  are  kept  constantly  in  balance. 
The  dally  balance  would  be  as  follows  : 


DAILY  TRIAL  BALANCE.  JANHAHY  1,  1911. 

Dr. 

a/c  A    

B    

C    

D   

E   

F   

Smith,   John Jii 

Jones,   William 11 

Cash   15 


$38.80 


Cr. 

J15.50 

10.50 

4.50 

.60 

7.50 

.20 


$38.80 


This  system  makes  rendering  statements  an  easy  matter. 
The  customer  has  his  original  Itemized  bills  and  the  state- 
ment I  send  him  is  merely  a  list  of  the  dates,  bill  numbers 
and  amounts,  footed  up.  I  find  that  It  is  very  seldom  nee 
essary  to  replace  a  lost  bill  or  make  an  itemized  statement, 
as  the  customer  almost  invariably  keeps  his  bills  to  check 
with  the  statement.  My  regular  form  of  statement  is  shown 
as  Fig.  3. 

In  addition  to  the  sales  book  I  keep  a  common  journal  for 
entering  debits  and  credits  that  are  not  sales,  and  In  this  ail 
payments  made  by  my  customers  and  all  incoming  invoices 
are  recorded.  The  entries  In  this  book  are,  of  course,  in- 
cluded In  the  daily  trial  balance  and  posted  from  It  to  the 
ledger.  When  a  customer  pays  his  bills  they  are  removed 
from  the  live  bill  file  and  put  away  In  a  transfer  binder  for 
record.  Thus  the  live  bill  file  contains  only  such  bills  as  are 
unpaid  and  the  amounts  of  them  correspond  with  the  debit 
entries  in  the  ledger  on  the  customer's  page.  With  the 
ledger  and  the  live  bill  file  both  open  before  me  I  can  make 
out  the  statement  of  a  customer  in  a  remarkably  short  time. 

It  is  obvious  that  the  department  account  credits  on  the 
dally  trial  balance  represent  the  sales  from  those  departments 
for  that  day,  so  at  the  end  of  each  month  I  make  from  the 
dally  trial  balances  a  complete  sales  summary  (Fig.  4)  which 
shows  the  sales  from  each  department  and  the  total  sales  for 
the  month.  From  these  sales  summaries  it  is  an  easy  matter 
to  make  a  similar  one  by  months  for  the  business  year,  and 
thus  I  can  ascertain  which  departments  of  the  business  are 
on  the  best  footing.  Every  item  of  expense  is  charged,  as 
far  as  possible,  to  the  department  that  caused  it,  and  thus 
each  department  Is  made  to  stand  on  its  own  feet.  The  over- 
head expense  that  can  not  be  traced  to  any  particular  de- 
partment Is  divided  in  proportion  to  the  sales  and  charged 
to  the  department  accounts  before  such  accounts  are  balanced 
to  profit  and  loss  at  the  end  of  the  fiscal  year. 


283 


Sari./  /f// 


,(4^.,.,^  /Ln 


JiHEL 


"vjZrvi^V 


_MA 


il^ 


M.2^ 


12fh 


±£>0 


^£e. 


z& 


//• 


// 


ro 


20 


Fig.  S.     Sales  record  distributing  by  departments.     Con  tributors  form  does  not  have  last  two  columns. 
32 


Cotter,  Ark., 

Mr.  John  Smith  Ja"  •  10,  1911 

Iii,account  with 

Cotter  Lumber  Co. 

Clarence  E.  Hopkins,  Proprietor 

Dealer  in 

Building  Material  of  All  Kinds 


I3ATF 


BILL  NUMBER 


Fig.  3.     Monthly  statement  form. 


There  are  many  devices  that  save  labor  In  connection 
with  this  system.  I  use  for  my  duplicate  bills  a  newly 
patented  paper  that  makes  a  copy  without  the  use  of  carbon 
paper.  I  also  use  an  adding  machine  that  sits  beside  my 
typewriter,  and  on  which  all  the  additions  of  the  work  are 
performed.  An  automatic  numbering  machine,  set  to  number 
the  bills  consecutively  in  duplicate,  keeps  track  of  the  num- 
bers for  me  without  danger  of  confusion.  But  these  devices 
are  not  at  all  necessary  to  the  working  of  the  system,  which 
is  not  at  ail  costly  and  is  adapted  to  any  yard.  Columnar 
sales  books  with  columns  for  any  desired  number  of  depart- 
ments are  kept  in  stock  by  stationers  and  do  not  command 
the   prices   of  special  ruled   books. 

Clarence  E.  Hopkins, 
rrop'r.  Cotter  Lumber  Company,  Cotter,  Arli. 

EDITOKIAL  DISCUSSION. 

This  contributor  has  a  very  good  and  complete  under- 
standing of  the  purposes  to  be  attained  in  bookkeeping, 
and  has  worked  out  an  excellent  special  plan,  though  not 
fully  complete,  for  handling  sales  and  billing,  but  the 
other  parts  of  his  books  offer  no  special  features.  In 
particular  he  is  the  only  contributor  thus  far  noted  who 
has  voiced  the  correct  idea  in  distributing  expenses — 
that  as  far  as  possible  they  should  go  against  the  classes 
of  merchandise  which  have  occasioned  them.  Many  con- 
tributors describe  a  very  complete  analysis  and  subdivi- 


sion of  expenses,  which  Mr.  Hopkins  does  not,  but  make 
no  provision  for  dividing  them  in  just  proportion  on  the 
merchandise  classes  handled. 

The  billing  form  used  is  very  simple,  having  a  heading 
only  and  no  ruling,  which  is  unnecessary  for  typewriter 
billing.  The  form  is  punched  for  binder,  and  after  en- 
tering on  sales  book  is  filed  to  customer's  name,  so  the 
binder  contains  together  all  the  unpaid  invoices.  The 
monthly  statement  form  is  very  simple  and  neat,  and 
entirely  adequate  if  the  customer  has  kept  his  invoices 
to  check  it  by,  as  he  should.  If  the  contributor  would  ar- 
range these  statements  in  a  suitable  file  and  post  direct 
to  them  instead  of  to  the  ledger  account,  posting  from 
the  statement  to  the  ledger  at  the  end  of  the  month 
(total  only),  he  would  save  work  and  his  system  would 
be  much  in  line  with  some  already  described. 

For  his  salesbook  Mr.  Hopkins  uses  a  stock  6-column 
journal,  and  has  a  set  of  six  rubber  stamps  which  he 
uses  to  stamp  in  the  department  headings,  giving  both 
letters  and  descriptions.  His  merchandise  classification 
is  excellent  and  probably  entirely  adequate  to  his  needs. 
In  the  form  as  reproduced  two  columns  have  been  added 
which  Mr.  Hopkins  does  not  have,  one  for  total  charge 
and  one  for  total  cash,  and  the  footing  of  the  six  mer- 
chandist  columns  balances  the  footing  of  these  two  total 
columns,  taking  the  place  of  the  separate  balance,  and 
connecting  it  as  a  permanent  record  with  the  page. 

This  contributor  shows  a  spirit  of  progressiveness  in 
his  use  of  tvpewriter  billing,  an  adding  machine  (which 
is  a  profitable  money-saving  addition  to  any  lumber  of- 
fice), numbering  machine,  fine  theory  of  expense  and  mer- 
chandise classifications  etc.  His  handling  of  all  book- 
keeping except  sales  in  the  old  routine  way  is  not  in 
line  with  his  up-to-dateness  in  these  other  matters;  but 
doubtless  he  will  recognize  this  in  his  study  of  this 
series  of  articles,  and  if  another  contest  should  offer 
within  a  year  or  two  we  predict  that  he  would  give  some 
of  the  other  contestants  a  hard  race  to  get  in  "on  the 
money. ' ' 


Simple  and  Direct  Method  in  Use  Among 
Dealers  in  England — Expedition  and 
Thoroughness  Combined— rStock  Rec- 
ord Laborious  but  Reliable  —  Books 
Employed  Easily  Kept  and  Invariably 
Accurate. 


2. 
3. 
4. 

5. 
6. 

T. 


AN  ENGLISH  METHOD. 

Largely  used  in  retail  firms. 
The  books  necessary  are  : 
1.     Rough  duplicate  invoice  book. 
Ready  money  daybook. 
Sales  daybook. 
Cashbook. 

Bought  invoice  book. 
Sales  ledger. 
Bought  ledger. 
8.     Stockbook. 

With  ail  transactions  each  customer  receives  an  Invoice 
made  out  from  a  duplicate  book  and  from  the  numbered 
counterfoils  these  transactions  are  entered  up  at  the  end  of 
each   day  : 

Ready  money  transactions  into  the  ready  money  book ; 
credit  transactions  Into  the  sales  day  book,  each  book  having 
columns  ruled  for  different  classes  of  goods  corresponding 
to  like  columns  in  the  stock  book  (summarizing  similar 
goods).  The  ready  money  transactions  at  the  end  of  each 
day  are  entered  Into  the  ready  money  book,  which  Is  totaled 
up  and  the  summary  or  grand  total  for  the  sale  of  each  kind 
of  goods  is  transferred  to  the  sales  daybook,  with  the  total 
of  the  monetary  put  in  a  column  by  Itself  headed  Ready 
Money  Sales.  The  credit  transactions  are  likewise  at  the 
end  of  each  day  transferred  to  the  sales  day  book  with  the 
total  of  the  monetary  value  put  in  a  column  headed  Credit 


Sales  Summary  for  January,  1911. 


Day 

A 

B 

c 

D 

E 

Total 

1 

15  50 

10  50 

4  50 

60 

7   50 

36  60 

2 

5  00 

17  32 

4  10 

7   50 

33  92 

3 

126  75 
144  25 

60. 
16  00 

24  60 
46  62 

4  40 
9  10 

15  00 
30  00 

173  45 
245   97 

Fig.   4. 

Monthly   sales 

summary   review 

of 

sash   and 

door  situation. 

33 

Sales.  The  sales  daybook,  which  should  be  totaled  up  each 
day  or  week  or  period  required,  then  gives  grand  totals  for 
goods  sold,  of  each  kind,  with  monetary  ralue  which  cast 
across  them  agrees  with  the  combined  totals  of  the  credit 
sales  and  ready  qioney  sales  columns. 

Cashbook. 

Cash  received  should  be  entered  Into  the  cashbook  on  the 
lefthand  side,  the  cash  received  for  ready  money  sales  in 
one  column  headed  Ready  Money  Receipts,  the  cash  for 
credit  sales  In  a  column  headed  Credit  Receipts,  and  If 
totaled  at  the  same  time  as  the  sales  daybook,  should  then 
give  the  total  for  ready  money  receipts,  which  should  agree 
with  the  corresponding  columns  or  total  In  the  sales  day- 
book, while  the  difference  between  the  credit  sales  and  credit 
receipts  columns  will  give  the  amount  of  book  debts  owed 
by  customers. 

On  the  rlghthand  side  of  the  cashbook  the  amounts  paid 
out  should  be  entered  In  columns  to  correspond  to  those  in 
the  invoice  book  headed  respectively  Stock  Payments,  Plant 
and  Buildings  Payments,  Sundry  Payments,  where  again  by 
deduction  may  be  obtained  the  amount  owing  to  creditors 
for  a  given  period. 

Invoice  Book. 

All  Invoices  of  goods  purchased  should  be  entered  in  this 
book  and  numbered  with  a  corresponding  number  put  on  the 
Invoice  before  it  Is  filed  away.  Thus  by  using  consecutive 
numbers  the  original  can  easily  be  found  without  trouble. 
These  entries  should  be  totaled  out  Into  columns  marked 
Stock,  Plant  and  Buildings,  Sundries.  The  entries  In  the 
stock  column  are  the  ones  to  transfer  to  the  stock  book, 
the  plant  column  needing  no  transfer,  being  for  what  Its 
name  Implies,  while  sundries  should  be  reserved  for  small 
ready  money  purchases,  not  for  sale  or  stock. 

Ledgers. 

The  two  ledgers  should  be  alphabetically  Indexed  and  Into 
the  sales  ledger  Is  posted  all  credit  column  items  from  the 
sales  daybook  on  the  rlghthand  side  and  on  the  left  side 
cash  received  from  the  credit  receipts  columns  of  the  cash- 
book  and  from  these  accounts  all  statements  of  accouats 
due  should  be  sent  out. 

In  the  bought  ledger  should  be  posted  all  Items  from  the 
stock  and  plant  and  building  columns  of  the  Invoice  book 
on  the  lefthand  side  and  corresponding  payments  from  the 
cashbook  on  the  rlghthand  side. 

Stockbook. 
The  stockbook  should  be  started  by  entering  in  separate 
columns  from  the  Invoice  book  stock  column,  all 
goods  purchased,  with  rate  for  them,  to  which  should 
be  added  from  time  to  time  further  purchases  and 
from  which  from  time  to  time  should  be  deducted  the  grand 
totals  for  goods  sold  from  the  sales  daybook,  the  individual 
columns  thus  giving  at  any  time  the  stock  of  any  particular 
article.  This,  If  worked  out  at  the  purchased  rate  (as  orig- 
inally entered)  and  placed  under  each  column  In  a  different 


colored  Ink  will  easily  give  the  value  of  any  particular 
stock,  and  also  If  the  sold  price  Is  entered  show  the  profit, 
while  If  all  columns  are  cross-cast  will  give  the  total  stock 
value  In  hand. 

Thus  may  easily  be  obtained : 

Stock  In  hand  (from  the  stock  book) 

Owing  by   customers    (from  cashbook) 

Estimated  value  of  plant  etc.   (from  Invoice  book)  .■ 

Total 

Less   owing   to    creditors 

Present  position 

Also 

Credit  sales  (from  sales  day  book) 

Ready  money  sales  (from  sales  day  book) 

Credit  receipts    (from  cashbook) 

Ready  money  receipts  (from  cashbook) 

Owing  by  customers 

Stock  purchases   (from  invoice  book) 

Plant  and  building  purchases  (from  Invoice  book).. 
Sundry  purchases   (from  Invoice  book) 

Stock   payments    (from   cashbook) 

Plant  and  building  payments   (from  cashbook) .... 
Sundry  payments   (from  cashbook) 

Owing  to  creditors 

ARCHIE   .T.    CLARKE,    NORWICH,    ENGLAND. 

EDITORIAL  DISCUSSION. 

They  do  things  thoroughly  in  England  and  this  article 
is  interesting  as  showing  how  they  do  their  lumber  yard 
bookkeeping;  and  doubtless  Mr.  Clarke  will  find  the 
articles  describing  American  methods  of  equal  interest 
to  himself.  He  has  been  so  thorough  and  painstaking 
in  his  description  that  really  no  explanation  is  needed 
except  as  to  some  terms  not  familiar  here,  and  a  little 
coniparison  of  the  system  with  our  routine  systems.  The 
' '  Ready  Money  Day  Book ' '  is  really  a  Cash  Saies  Book ; 
the  ' '  Sales  Daybook ' '  takes  charge  sales  entries,  and 
also  takes  a  daily  total  from  the  Cash  Sales  Book,  with 
a  separate  ftolumn  provided  for  the  cash.  On  this  side 
we  would  throw  the  first  book  away  and  enter  all  sales 
tickets  in  consecutive  numerical  order  on  the  one  sales 
book,  with  separate .  columns  for  cash  and  for  charges ; 
and  later  systems  do  away  entirely  with  the  book,  or  else 
use  it  merely  to  recapitulate  by  ticket  numbers  instead 
of  names,  posting  charges  direct  from  the  tickets. 
"Credit  Sales"  is  understandable,  though  we  usually 
call  them  Charge  Sales;  "Credit  Receipts"  means  (iash 
Received  on  Account.  The  description  of  ledger  post- 
ings seems  to  indicate  a  reversal  of  the  sides  of  the  ac- 

34 


count,  "Cr."  to  the  left.  The  Cash  Book  is  an  old 
familiar  form.  The  Invoice  Book  or  Purchase  Record  is 
an  excellent  feature  of  the  system  as  described,  though 
it  would  seem  necessary,  instead  of  having  merely  a 
"Stock"  column  that  it  should  have  columns  corre- 
sponding to  the  merchandise  distribution  or  depart- 
ments on  the  saJes  records. 

There  is  nothing  especially  new  in  the  Stock  Record 
as  described,  except  its  thoroughness  in  handling  cost 
and  selling  prices  on  the  quantities  handled  through  the 
item  accounts.  It  would  require  a  good  deal  of  labor 
to  keep  a  stock  record  up  on  this  plan;  but  doubtless 
our  English  brethren  do  not  begrudge  this  labor,  and 
appreciate  as  we  have  not  yet  learned  to  the  importance 
of  keeping  close  track  of  money  received,  disposed  of  or 
on  hand,  whether  it  be  in  the  form  of  actual  currency 
passing  through  the  cash  drawer  or  material  passing 
through  the  yard.  No  one  can  say  that  the  policy  which 
hunts  two  days  for  a  nickel  out  in  the  cash  or  trial 
balance,  whUe  $5  worth  of  material  could  be  taken  from 
anywhere  in  the  yard  without  the  accounts  ever  reveal- 
ing it,  is  a  consistent  policy. 


Bank  Accounting  Systems  Adapted  to 
Lumber — No  Original  Entry  Books, 
Tickets  Used  Instead — Trial  Balance 
Tri-Weekly  by  Adding  Machine — Spe- 
cial Ledger  Plan — Sound  and  Original 
Financial  System. 


KEEPING   BOOKS   BY   ADDING  MACHINE. 

The  article  published  June  10  is  the  last  of  those 
contributed  to  the  prize  contest  and  selected  for 
reproduction  in  practical  entirety.  In  the  fifty-eight 
articles  it  was  inevitable  that  there  should  be  some 
duplication,  and  the  remaining  articles  describe  sys- 
tems which  as  a  whole  are  practically  identical  with 
sonie  one  that  already  has  been  published. 

There  are  a  number  of  original  suggestions  cover- 
ing individual  bookkeeping  or  office  system  features, 
which  have  been  gleaned  out  and  will  be  published. 
As  an  interlude,  however,  this  week's  article  will 
describe  the  accounting  system  used  by  W.  M.  Hazen, 
of  Three  Rivers,  Mich.,  as  exhibited  last  week  in  his 
office. 

Mr.  Hazen  was  a  bank  cashier  before  going  into 
the  retail  lumber  business,  and  bank  accounting  meth- 
ods are  prominent  in  his  method  of  keeping  books. 
Really  he  does  not  keep  books,  but  only  a  book,  the 
ledger    being    the    only    book    record   in    his    system, 


original  transactions  being  recorded  entirely  and  solely 

on  slips,  as  in  a  bank. 

This  sounds  somewhat  revolutionary,  but  Mr. 
Hazen  'a  accounts  in  general  arrangement  very  closely 
resemble  a  form  used  largely  in  lineyard  practice 
and  of  which  several  variations  already  have  been 
described.  Fig.  1  shows  his  sales  ticket,  which  is 
put  up  in  plain  pads  with  a  yellow  duplicate,  which 
is  the  copy  given  to  the  customer.  These  are  used 
for  charge  sales,  for  cash  sales,  and  also  as  a  credit 
memo  for  merchandise  returned.  Pig.  2  is  a  cash 
receipt  which  is  used  for  practically  all  purposes 
except  cash  sales,  where  the  sales  ticket  also  records 
the  cash  received  in  payment.  Cash  sales  usually 
are  put  consecutively  upon  the  one  cash  ticket,  to- 
taled forward  to  successive  sheet  numbers  to  cover 
the  sales  for  the  day.  For  all  cash  payments  no 
duplicate  for  the  payee  being  required,  a  plain  blank 
ticket  is   used. 

It  will  be  noted  that  none  of  the  forms  bear  a 
serial  number.     A  number  system  is  some  protection 

VBHBER—W.  M.  Hazen — coal 


:••«■.  PlaitM.  S*lt.  Brick.  Li«>.  SmIi  u 
D*«n,  Wir*  r™«.  Po»to.  GIbu,  RmA^ 


Three  Riven,  MIcb., l£l . 


KeceiTe!>  of. 


-DOLLARS 


On  tccouni  in  Tull.    Thtaks. 

V.  M   HAZEN. 

» Per...  

Fig.  S.     Cash  receipt,  duplicate,  SxB  inches  wide. 

against  lost  tickets,  Mr.  Hazen  concedes,  but  it  is 
the  purpose  in  his  oflRce  not  to  lose  any  tickets.  The 
office  copy  goes  directly  on  the  patent  spindle,  from 
which  the  wind  can  not  lift  it,  and  it  is  as  care- 
fully guarded  as  cash  in  drawer.  A  lost  ticket  repre- 
senting cash  would,  of  course,  be  missed  when  the 
day's  cash  balance  was  made  up;  but  if  it  represents 
merchandise  sold  on  account  and  no  stock  record 
is  kept  there  is  no  audit  that  will  discover  the  loss 
of  that  ticket,  unless  the  customer  comes  in  with  his 
copy  to  pay  the  bill.  In  many  offices  a  numerical 
series  on  the  tickets  is  needed  to  check  against  this 
possible  leak.  Mr.  Hazen,  however,  is  fortunate  in 
having  his  office  in  the  constant  charge  of  a  very 
capable  assistant.  Miss  Etta  M.  Phelps,  who  came 
to  his  office  six  years  ago  from  high  school.  A 
capable  person  in  undivided  charge  of  office  mat- 
ters is  able  to  avoid  errors  which  are  apt  to  come 
in  when  office  work  is  divided  between  several  per- 
sons who  give  a  considerable  share  of  their  time 
to  yard  duties.  • 


Cash  is  balanced  up  every  night,  the  cash  tickets 
for  receipts  and  payments  being  listed  and  totaled  by 
adding  machine  to  check  up  the  cash  on  hand, 
fivery  second  day  Miss  Phelps  makes  up  an  adding 
machine  balance  sheet,  of  which  a  sample  is  repro- 
duced herewith.  In  making  up  this  sample  form  she 
used  fictitious  amounts,  not  revealing  any  confidential 
information  of  the  Hazen  business,  and  added  type- 
written legends  for  which  in  daily  practice  brief 
pen   symbols   are  employed. 

Charge  sales  are  first  sorted  out,  arranged  alpha- 
betically, posted  to  ledger,  and  listed  in  the  first 
column  under  debits,  amounting  here  to  $203.80. 
Credits  to  customers  are  then  taken  up,  also  ar- 
ranged alphabetically  and  posted  to  ledger.  They 
are  then  listed,  but  as  they  consist  of  both  cash 
and  merchandise  returns,  the  merchandise  returns 
are  listed  with  the  eliminating  key  down,  so  that 
they  are  printed  but  do  .not  go  into  the  total.  The 
use  of  the  key  also  causes  the  item  to  be  marked 
with  the  t  sign.  When  all  the  credits  are  listed 
the  subtotal  is  taken,  which  is  the  total  of  the  cash 
credits.  By  the  use  of  the  subtotal  key  the  total  is 
printed,  but  instead  of  ueing  cleai-ed  from  the  ma- 
chine, remains,  so  that  further  additions  may  be  made 
to  it.  The  eliminated  items  that  have  been  listed 
are  then  relisted  and  the  total  taken,  which  is  a  total 
of  both  cash  and  merchandise  credits  to  customers. 
By  subtracting  from  this  total  the  subtotal  of  cash 
credits  the  balance  would  show  the  credits  for  mer- 
chandise returned;  but  subtraction  on  an  adding  ma- 
chine is  more  complicated  than  addition  and  gives 
more  room  for  error,  and  Miss  Phelps  has  preferred 
again  to  add  these  items  and  ascertain  their  separate 
total,  $10.41.  This  is  then  carried  to  the  first  column 
and  deducted  from  the  charge  sales,  leaving  a  bal- 
ance of  $193.39.  To  this  is  added  the  cash  sales, 
$67,  producing  the  total  sales  for  the  day  with  re- 
turns deducted.  From  this  the  gross  profit  on  the 
day's  sales,  $75.50,  is  deducted,  leaving  $184.89  as 
the  cost  price  of  merchandise  sold. 

How  Profits  Are  Obtained. 

Just  here  a  digression  must  be  made  to  show  how 
the  $75.50  profits  have  been  obtained.  The  sales 
ticket  form  shows  a  blank  stub  at  the  left.  Mr.  Hazen 
has  gone  over  the  tickets  and  figured  in  this  space 
the  gross  profit  on  each  item  sold,  and  these  are 
totaled  forward  on  the  adding  machine  (on  a  slip, 
not  showing  on  the  balance  sheet),  and  this  total 
amounts  to  $75.50. 

The  day's  transactions  are  now'  all  listed  except 
cash,  which  is  not  listed  here,  presumably  because 
the  cash  has  been  balanced  in  a  separate  operation. 
From   results    here    shown,   however,    it    is   apparent 

35 


that  the  cash  record,  if  added,  would  have  been,  in 
brief: 

Previous  balance   $126.70 

Cash  sales   67.00 

Cash   on   accounts 62.11 

Paid  out  in  sundry  expense  items $     6.55 

Deposited  in  bank 179.25 

Balance  on  hand 70.01 

J255.81  J255.81 
From  this  point  the  statement  proceeds  in  third 
column  to  add  the  day's  transactions  to  the  previous 
account  totals  as  taken  from  the  preceding  statement 
of  August  3.  "Books  Aug.  3"  means  previous  total 
of  debtor  accounts.  To  this  is  added  the  current 
charges,  $203.80,  and  the  day's  credits,  $72.52,  are 
deducted  to  show  the  new  balance  due  from  customers. 
The  merchandise  account,  as  here  shown,  carries  cost 
prices  only  and  its  balance  is  supposed  to  show  the 
cost  value  of  merchandise  stock.  From  the  previous 
balance  the  cost  value  of  the  day's  sales,  $184.89, 
is  deducted  to  show  the  balance  of  merchandise  on 
hand.  In  like  manner  the  expenses,  bank  account 
and  gross  profit  account  are  forwarded.  "Books 
credit"  is  accounts  payable,  in  which  there  was  no 
change  ou  the  current  transactions. 

A  trial  balance  of  the  statement  now  shows  that 
the  debit  balances  in  customers'  accounts,  merchan- 
dise stock,  expense  account,  bank  and  cash  balance 
the  total  credits  in  capital  account,  profit  and  loss 
account  and  accounts  payable.  The  statement  is 
complete  except  to  verify  the  postings  to  customers' 
accounts,  from  the  tickets;  and  these  listed  from 
the  ledger  show  $9,131.28,  exactly  balancing  with  the 
"Books  Aug.  5",  and  indicating  that  the  posting  has 
been  correctly  done.  The  sheet  has  therefore'  audited 
and  proved  the  accounts  as  completely  for  the  two 
days  as  is  done  by  the  usual  monthly  trial  balance. 
Personal  Account. 
There  is  also  a  somewhat  peculiar  relationship  be- 
tween the  accounts  of  the  business  and  the  private 
affairs  of  the  owner  in  this  case.  Mr.  Hazen 's  rela- 
tions with  the  bank  are  a  private  matter  and  do  not 
appear  on  the  books.  When  the  business  needs  money 
he  supplies  it,  and  the  accounts  do  not  show  whether 
it  comes  from  his  own  funds  or  whether  he  borrows 
it.  As  far  as  the  business  is  concerned  it  makes  no 
difference.  The  business  also  owns  no  buildings  or 
site,  but  is  Mr.  Hazen 's  tenant  and  pays  him  a  regular 
monthly  rental.  He  personally  owns  the  site  and 
treats  the  money  which  has  gone  into  the  buildings 
as  his  personal  funds.  Thus  the  business  balance 
sheet  is  divested  of  assets  invested  in  buildings  whose 
forced  sale  value  might  be  vastly  different  from  their 
book  value,  and  the  incident  problem  of  annual  de- 
preciation is  also  eliminated.  All  the  assets  of  the 
business  are  in  cash,  accounts  and  merchandise.     Its 


only  liabilities  are  to  the  owner,  for 
capital  investment,  undivided  profits 
and  credit  on  personal  account  for 
working  funds  supplied  in  addition  to 
original  investment. 

All  this  contributes  to  a  clean  an- 
nual statement,  and  in  the  final  clos- 
ing of  the  books  there  is  another 
practice  that  contributes  to  this.  The 
business  has  paid  rent  to  Mr.  Hazen, 
and  also  a  regular  salary.  The  rent 
is  based  upon  the  same  considerations 
that  would  influence  a  lease  from  or 
to  outside  parties;  the  salary  prob- 
ably is  somewhat  low.  In  addition,  in 
tlie  closing,  Mr.  Hazen  takes  interest 
on  the  amount  of  his  permanent  and 
floating  investment;  and  with  tliese 
deductions,  together  with  the  usual 
conventional  costs  of  doing  business, 
the  remainder  he  calls  his  net  profit. 
It  is  what  his  time  and  money  de- 
voted to  the  business  have  paid  him, 
over  and  beyond  what  they  might 
reasonably  be  considered  worth  if  ho 
were  loaning  his  money  out  at  the 
usual  interest  and  selling  his  service 
to  someone  else. 

The  Inventory  Check. 

At  the  end  of  the  year  also  an 
inventory  is  taken  to  check  up  on 
his  system  of  figuring  the  stock  ac- 
count. Always  more  stock  has  been 
found  on  hand  than  is  shown  by  the 
balance  in  the  merchandise  account, 
but  the  results  have  come  quite  close, 
the  difference  usually  running  from 
67  cents  to  $1.33  for  each  $100  of 
sales  made  during  the  year.  One  year 
it  was  as  low  as  27  cents  that  being 
a  year  of  falling  values.  Error  dif- 
ferences of  less  than  1%  percent 
accumulating  during  a  year  is  work- 
ing pretty  close,  considering  how  the 
work  is  done.  Stock  will  come  in 
during  the  year  at  widely  varying 
prices  for  the  same  item.  Stock  which 
cost  a  specific  price  is  located  pretty 
closely  as  to  pile  and  that  cost 
used  in  the  figuring  until  that  par- 
ticular stock  is  used  out.  Odd 
profit  figures  such  as  7  cents  would 
be  thrown  to  even,  such  as  5  cents, 
the  intention  being  to  balance  these 
differences  as  much  as .  possible. 
Mr.  Hazen  does  this  figuring  him- 
self because  of  these  complications. 
Once  when  he  was  away  from  home 
for   a    couule   of   weeks   Miss   Phelos 


Auguat  5, 

1910 

, 

rcblts 

Credits 

Balance 

Dr 

* 

» 

* 

¥ 

.28 

.15# 

Books 

Aug  3 

9,000.00 

Books 

9,131.28 

10.30 

3.44# 

Bbta 

"     5 

203.60 

Udae 

26,815.11* 

.42 

6.93 

E^enae 

3,100.07 

1.20 

2.00 

9,203.60* 

Bank 

1,292.40 

1.50 

17.13 

CrdtB 

"     5 

72.52 

Cash. 

70.01 

1.40 

2.30 

1.25 

4.02# 

Books 

Aug  5 

9,131.28 

40,408.87* 

3.75 

.04# 

2.00- 

.20# 

Cr. 

12.47 

2.00# 

Mdse 

Aug  3 

27,000.00* 

Capital 

30,000.00* 

10.75 

3.75 

Sales 

»     5 

164.89 

P  &  I 

5,214.60 

1.05 

5.00 

.  Bobka 

5,134.27 

.57 

.56# 

Sfdse 

Aug  5 

26,815.11 

2.77 

5.00 

40,406.87 

1.73 

20.00 

1.05 

Casb 

Sjf 

Aug  3 

3,093.52 

2,75 

62.11* 

"     5 

•6.55 

Ledger 

2.75 

Udae  Ret. 

1,242.62 

7.10 

.15 

"     5 

3,100.07* 

1,620.00 

1.20 

3.44 

1,271.96 

3.06 

4.02 

1,256.29 

3.35 

.04 

Bank  Aug  3 

1,113.15 

1,701.39 

.94 

.20 

Dep 

"     5 

179.25 

1,052.12 

1.15 

2.00 

1,086.88 

2.46 

.56 

Bank 

"     5 

1,292.40* 

4.89 

Total 

J, 131.28* 

1.50 

72.52* 

2.50 

B&L 

Aug  3 

5,139.10 

2.75 

.15 

"     5 

75.50 

3.54 

3.44 

10.67 

4.02 

"     5 

5,214.60* 

4.60 

.04 

.35' 

.20 

16.29 

2.00 

Book  Cr 

5,194.27)!! 

4.00 

.56 

2.75 

Mae  Pet 

2.15 

10.41* 

.15 

4.18 

' 

3.75 

23.64 

.29 

38.51 

208.80* 

10.41  Leas  Mdaa  R< 

td 

193.39 

67.00  Caah  Salea 

260.39* 

75.50  Profit 

.   184.89 

.  .. 

Fia.  3.     Adding  machine  statement  taken  every  second   day. 


did  it  and  he  refigured  on  his  return  and  found 
very  few  and  unimportant  differences.  If  he  would 
establish  standard  costs  approximating  the  markets, 
and  whenever  a  purchase  was  made  at  a  lower 
figure  charge  it  to  merchandise  stock  at  standard 
cost  and  throw  the  balance  into  an  account  for 
"purchasing  profits"  the  standard  cost  schedule  would 
greatly  simplify  the  figuring  of  sales  profits  and 
enable  Miss  Phelps  to  handle  it  without  any  dif- 
ficulty, a  point  which  Mr.  Hazen  was  very  quick 
to  recognize  when  it  was  suggested  to  him.  If  the 
market  advanced  materially  on  a  particular  item  the 
standard  cost  could  be  changed,  the  amount  in  stock 
approximately  inventoried  and  the  profit  on  it  from 
the  advance  figured  as  a  market  profit,  the  operation 
being  reversed  for  market  declines,  and  with  these 
adjustments  the  profit  figuring  on  sales  should  produce 
accurate  results  without  requiring  the  owner's  per- 
sonal attention  in  the  figuring. 

The  tickets  for  current  statement  are  filed  in  the 
order  of  the  statement  on  a  small  arch  binder  with 
a  heavy  device  for  punching  the  proper  holes  in  the 
tickets.  When  removed  to  make  room  for  the  next 
set  they  are  bound  together  in  a  packet  and  kept 
for  as  long  as  may  be  necessary.  In  posting  to  ledger 
account  it  is  customary  with  the  ordinary  run  of 
customers  to  carry  the  sales  item  to  the  ledger  and 
from  there  to  the  monthly  statement,  referring  here 
to  customers  wno  habitually  lose  their  sales  tickets. 
With  city  customers,  business  men  who  keep  the 
individual  invoices,  this  is  not  carried  out.  It  might 
be  possible,  perhaps,  to  induce  the  careless  cus- 
tomer to  reform  by  printing  on  the  tickets  a  request 
that  it  be  preserved,  and  in  other  ways;  but  mean- 
while the  practical  way,  or  course,  is  so  to  render 
the  account  as  to  promote  its  prompt  audit  and 
settlement.  This  is  one  of  the  points  on  which  prac- 
tice varies  widely. 

The  Ledger  Balance. 

The  reader  may  be  curious  to  know  how  the  ledger 
balance  of  customers '  accounts  comes  off  in  only 
seven  items,  when  obviously  in  a  business  of  this  size 
there  must  be  more  open  customers'  accounts  than 
that.  A  description  of  the  special  ledger  used  will 
make  this  clear.  It  is  a  looseleaf  book  with  a  large 
page,  with  a  balance  column  ruling.  It  is  divided 
by  index  sheets  into  eight  sections,  seven  carrying 
customers'  accounts  and  one  the  internal  or  private 
accounts.  Taking  hold  of  any  index  tab  and  pulling 
it  a  tablet  slides  out  from  inside  the  index  sheet, 
being  permanently  attached  but  coming  out  per- 
haps six  inches  to  reveal  an  erasable  tablet,  which 
is  renewable  as  the  paper  wears  out,  and  which  car- 
ries in  pcBcil  the  trial  balance  for  that  section  of 
the  ledger.  This  trial  balance  is  changed  for  each 
account  as  postings  occur  to  the  account,  and  is  there- 
fore kept  up  perpetually. 

In  order  to  condense  and  simplify  this  process,  a 


number  of  pages  are  used  in  the  front  of  each  sec- 
tion for  small  or  petty  accounts,  of  which  perhaps 
sixteen  or  twenty  will  be  placed  upon  a  single  page, 
and  the  balance  total  of  the  page  is  taken  as  a  whole. 
Under  the  first  section,  for  instance  the  first  sheet 
may  carry  accounts  Aa  to  An,  and  there  may  be 
eight  to  a  dozen  such  ledger  sheets  of  petty  accounts. 
It  is,  of  course,  obviously  impractical  with  so  many 
accounts  to  a  page  to  change  the  final  balance  for 
each  individual  item  posted.  A  blotter  book  is 
■  therefore  used  with  a  separate  pair  of  columns  for 
each  petty  account  page,  running  under  A  as  Aa-An, 
Ao-Az  etc.,  according  to  the  pages.  Each  posting 
to  the  Aa-An  page  is  therefore  noted  in  the  corre- 
sponding columns  of  the  blotter,  either  as  a  debit  or 
a  credit,  and  w  jen  the  posting  is  completed  the  total 
of  the  blol  tsT  column,  combined  with  the  previous 
page  total,  will  give  the  new  page  total  for  the  tab- 
let. The  tablet  itself  is  totaled  when  brought  up  to 
date,  and  the  eight  tablet  totals  when  added  to- 
gether will  give  the  total  ledger  balance.  The  seven 
sections  devoted  to  customers'  accounts,  considered 
separately,  give  the  total  for  that  division,  which 
will,  of  course,  balance  with  the  private  accounts 
carried  in  the  eighth  division.  The  ledger  total 
shown  on  the  sheet  is  obtained  by  a  list  of  the  first 
seven  section  totals.  In  correcting  the  tablets  it  is 
necessary  to  erase  and  change  only  the  accounts  to 
which  new  postings  have  been  made. 

It  probably  will  be  quite  clear  from  the  foregoing 
just  how  the  statement  is  produced,  but  there  are 
some  other  interesting  points  about  it.  The  book 
credit  or  total  of  accounts  payable  consists  entirely 
of  the  owner's  private  account.  There  never  are  any 
other  creditors  on  the  books.  All  purchase  invoices 
are  discounted,  and  therefore  are  not  entered  up 
except  in  connection  with  the  settlement.  Freight 
will  have  been  paid  some  time  in  advance  of  that, 
but  is  also  held  on  ticket  so  that  the  check  for 
freight  goes  into  the  accounts  along  with  the  check 
to  the  mill  for  balance  of  invoice  less  freight.  Mr. 
Hazen  does  not  expect  the  millman  or  wholesaler  to 
supply  him  with  any  part  of  his  working  capital. 
He  has  an  idea  that  he  can  get  it  more  cheaply  from 
the  bank,  and  have  his  entire  outside  liability  thereby 
concentrated  in  one  place,  where  it  can  be  more 
easily  handled  in  case  of  sickness  or  other  emer- 
gency. He  believes  further  that  in  his  present  prac- 
tice he  not  only  saves  the  discount  but  is  placed 
at  a  buying  advantage  that  is  worth  as  much  more, 
because  it  is  well  known  that  a  sale  to  him  means 
quick  returns.  Additional  working  capital  as  needed 
is  borrowed  from  the  local  bank  on  30-day  paper 
discounted  in  advance.  The  purpose  is  to  borrow 
sufficient  money  not  only  for  working  needs  but  to 
maintain    a    creditable    balance.     Bather    than    allow 


his  balance  to  run  at  a  hundred  dollars  or  so  for  a 
month  he  will  borrow  an  extra  thousand  and  pay 
interest  for  the  purpose  of  maintaining  his  daily 
balance  about  $1,000.  From  his  own  bank  experience 
he  knows  that  one  of  the  first  things  the  banker 
considers  in  passing  upon  loan  credits  is  the  average 
size  of  bank  balance  maintained  by  the  customer, 
and  dealing  liberally  with  the  local  banker  in  this 
regard  the  banker  deals  liberally  with  him.  For  in- 
stance, the  1,600-ton  capacity  of  the  new  coal  ele- 
vator wiU  be  filled  with  hard  coal  at  spring  prices, 
producing  a  nice  carrying  profit,  and  the  carrying 
will  be  done  on  additional  funds  supplied  by  the 
banker.  When  it  is  considered  how  desirable  a  good 
bank  connection  is,  the  thought  occurs  that  a  pre- 
vious banking  experience  is  not  a  bad  preparation  for 
a  retail  lumberman. 

The  Adding  Machine. 

The  adding  machine  which  is  here  so  important 
and  labor  saving  a  bookkeeping  implement  is  a  Bur- 
roughs   of    ordinary   type,    listing   to    six    figures   and 


uiMBoi—  W.  M.  Hazen— COM.  ^'""  "'""•  •"«'•• 

/''V^  rUal*.  laM.  BrM.  Ua«  iMb  ^  «aM  n 

V>»-^»i»^r— ^riiii  ■■■i.a.di^  .«■» 


•WMMFi.. 

A«r~ 

»IT 

._„.. 

.... 

r^ 

— 

^->]ii-^ 

^^ 

-^_,,->«--~v-' 

"N 

U^^ 

L 

— k 

. .^ 

-^,.. 

Fig.  1.     Sales  ticket,  duplicate,  4.6x7.5  inches  wide. 


totaling  to  seven.  It  should  really  be  of  7-figure 
listing  capacity.  In  the  final  balance,  for  instance, 
occurs  a  7-figure  merchandise  item  of  $26,815.11.  It 
was  necessary  here  for  Miss  Phelps  to  raise  the  car- 
riage, discharge  the  first  item  by  using  the  total  key, 
and  list  separately  9,000,  9,000  and  8,815.11,  accumu- 
lating a  total  of  26,815.11,  all  this  with  the  carriage 
raised  so  the  work  did  not  print.  Closing  the  car- 
riage she  then  printed  this  amount  by  the  use  of  the 
subtotal  key,  retaining  the  total  in  the  machine. 
Again  raising  the  carriage  she  took  in  the  number 
first  listed,  and  again  closing  the  carriage  proceeded 
with  the  work  in  the  usual  way.  The  6-figure  ma- 
chine was  thus  by  indirection  made  to  perform  a  7- 
figure  operation  in  one  of  the  very  few  instances 
where  it  is  necessary  to  handle  sums  larger  than 
$9,999.99. 

it  will  be  noted  that  Mr.  Hazen-  carries  no  depart- 
mentizing  of  merchandise  and  no  classification  of 
expenses.  Giving  his  personal  attention  to  the  busi- 
ness, he  believes  he  has  a  thorough  grasp  of  such 
details  without  carrying  them  out  in  the  main  ac- 
counts. From  the  tickets,  however,  is  taken  off  a 
tabular   statement  showing  quantity  sales   in  lumber, 

37 


hard  coal,  soft  coal  and  numerous  stock  items,  and 
figuring  aggregate  gross  profits,  expenses  and  net 
profits,  accumulating  these  figures  for  the  month  and 
then  by  months  for  the  year,  for  comparative  puf- 
poses,  amounting  therefore  to  a  subdistribution  apart 
from  the  main  accounts,  which  could  be  carried  to 
any  desired  length  as  a  subdivision  of  any  of  the 
main  accounts. 

Mr.  Hazen 's  bidaily  statement,  as  here  described, 
closely  resembles  the  daily  exhibit  made  in  some  of 
the  widely  used  lineyard  systems,  except  in  the  man- 
ner of  its  production  by  use  of  adding  machine.  His 
theories  of  business  finance  suggest  no  such  com- 
parison; they  are  highly  original,  carry  the  weight 
of  his  own  banking  experience  and  of  their  own 
essftntial  and  evident  soundness,  and  will  well  repay 
careful  study  by  any  retailer,  regardless  of  whatever 
bookkeeping  system  he  may  prefer. 


New  Way  of  Keeping  Track  of  Stock 
— Perpetual  Pile  Record  Checked 
Against  Office  Record— Duplicate 
Ticket  That  Gets  Triplicate  Results. 


KEEPING  STOCK  RECCED. 

I  send  you  herewith  specimen  sheets  which  should  be  self- 
explanatory,  but  a  few  remarks  may  help  to  demonstrate 
more  clearly.  The  piles  of  lumber  etc.  would  be  numbered 
and  a  piece  of  dressed  lumber,  say,  1x6 — 4  feet  nailed  to 
each  pile.  The  order  (Fig.  1)  would  be  made  out  In  the 
office,  banded  over  to  the  yard  salesman,  who,  after  filling 
each  Item,  would  mark  the  number  of  pile  and  the  balance 
still  In  each  pile  (taken  from  the  record  on  the  dressed 
board).  The  customer's  bill  (Fig.  2)  would  then  be  made 
out  In  the  office.  When  delivery  Is  made  the  customer  simply 
signs  the  receipt,  tears  off  at  perforation  and  returns  the 
receipt  to  the  teamster  and  retaining  the  Itemized  bill  him- 
self. The  pile  record  In  the  office  (Fig.  3)  Is  a  perfect 
check  on  each  pile,  for  If  the  salesman  sends  In  a  wrong 
balance  It  would  be  immediately  detected.  It  also  gives 
proper  record  In  feet  of  purchases  and  sales.  The  postings 
to  the  ledger  (looseleaf)  Is  done  direct  from  the  counter 
checkbook  both  for  merchandise  and  received  on  account. 
The  counter  checkbook  record  (looseleaf.  Fig.  4)  Is  placed  at 
risht  band  when  posting,  being  used  the  same  as  the  reverse 
posting  slip,  and  each  time  an  amount  Is  posted  the  same 
amount  Is  placed  In  Its  proper  column,  the  difference  be- 
tween the  Credit  and  On  Account  columns  always  will  show 
the  amount  outstanding.  Each  day's  sales  and  the  total  of 
the  received  on  account  are  each  posted  to  their  respective 
columns  In  the  cashbook. 


My  ledger  Is  kept  In  two  sections,  termed  sales  ledger  and 
general  ledger,  there  being  separate  columns  In  the  cashbook 
from  which  to  post  the  diffierent  amounts  to  their  respective 
ledger  sections.  S.  Shaw,  Dresden,  Ont. 

In  a  supplementary  letter  Mr.  Shaw  says: 

In  the  charge  sales  column  in  the  book  record,  should  there 
be  any  material  returned  or  credited,  and  with  no  debit 
entry,  the  saftie  is  deducted  from  the  following  sale  or  sales. 

My  aim  and  claim  in  bookkeeping  is  that  postings  should 
be  made  as  direct  to  the  ledger  as  possible,  and  to  eliminate 
all  unnecessary  entries,  but  consistent  with  proper  check  or 
proof  as  to  correctness  (as  all  are  liable  to  mistakes),  and 
this  I  think  is  exemplified  in  this  system.  The  carrying  of 
entries  to  the  cashbook  and  thence  to  the  ledger  I  contend 
is  useless,  as  in  this  system  of  posting  everything  direct  to 
the  ledger  from  slips  you  are  assured  that  if  the  totals  of 
your  cash  sales  and  on  account  are  correct,  then  your  post- 
ings must  be  correct.  My  books  are  kept  double  entry  and 
books  from  which  postings  are  made  are  provided  with  a 
separate  column  for  sales  and  general  ledger  (even  my  bill- 
book  from  which  I  post  direct  to  ledger),  which  provides  for 
any  entry  that  could  possibly  be  made.  My  billhook  Is  also 
provided  with  an  Interest  column  to  provide  for  interest  that 
may  be  added  to  an  account  or  a  renewal  note,  and  there  is 
also  a  column  showing  the  face  of  the  note,  the  postings  of 
which  are  both  made  to  their  respective  accounts  each 
month.  In  this  enclosure  there  is  copy  of  statement  issued 
to  employers  each  month,  the  items  of  jvhlch  are  readily 
obtained.  The  explanations  herewith,  together  with  former 
letter,  should,  I  think,  give  you  full  understanding  of  the 
system. 

EDITORIAL  DISCUSSION. 

It  wiU  be  noted  that  the  contributor  has  hardly  de- 


ORDER 

No.  I 


ChtcludBy. 


M. 


^o 


-191.Q- 


<=f;2-'7^Tl<U'^^JI. 


1^ 


JIQ 


.2^00 


ys,' 


/ 


Chk       Balance 


^ 


/(^2c 


Vig.  1.     Yard  Order,  4x6  in,,  high,  in  duplicate. 


BOOK 
1 

Reed,  good*  as  per  bill  No. 

2 

'"     .    fv       . 

BOOK 
1 

AectM.  will 

_        Ihetden  ^^-/^^--^^go. LS. 

2 

•^.3^  ^7^^?^  .^^^  -^&ir 

'"•—?;!  SHAW  LUMBER  CO. 

not  b*  r«n</«r*</  In  dmtait.  mo  mm  thU  hill. 

Order  No,  -^ 

-^ 

-T^o '_  /j?-/cr,j^r^-^       1 ^ 

^s^ 

^_~— ^""^^ 

Fig.   2.     Sales   Ticket,   customer's   copy,   4x6   in.   high. 
Note  detachable  receipt  at  top. 

scribed  a  complete  bookkeeping  system,  confining  him- 
self largely  to  billing  and  charging  and  stockkeeping 
system;  but  here  he  seems  to  have  hit  the  target  plump 
in  the  center  and  such  criticism  as  may  be  offered  will 
be  on  details  rather  than  upon  the  plan  itself. 

The  stock  system  described  is  the  only  one  contributed 
which  keeps  the  record  at  the  pile  or  bin  and  in  the 
oflSce  as  well,  checking  one  against  the  other.  It  is,  of 
course,  more  work  than  to  keep  the  oflSce  record  alone, 
but  it  is  bound  to  accomplish  results,  and  the  other 
plan  has  often  been  tried  and  abandoned  in  disgust,  be- 
cause the  man  keeping  the  oflSce  record  did  not  have  the 
cooperation  of  the  man  or  men  keeping  the  pUe  and 
discrepancies  were  bound  to  get  in  which  would  not  be 
discovered  until  long  after  the  opportunity  for  running 
them  down  had  passed.  Here  the  man  on  the  yard 
knows  that  nothing  can  happen  to  the  pOe  without  a 
ticket  for  it,  without  its  being  discovered. 

There  is  one  additional  detail  which  would  conuect 
the  pile  record  more  closely  with  the  actual  pile  con- 
tents. Most  stock  is  dimension,  a  given  number  of  feet 
in  each  piece,  and  a  given  number  of  pieces  to  the 
course.  Beginning  from  the  bottom  and  marking  the 
end  of  the  last  right  hand  piece  of  each  fifth  course  with 
its  numerical  number  with  an  indelible  lumber  crayon, 
and  extending  the  marking  to  new  lumber  as  added,  the 
actual  pile  contents  can  be  determined  very  quickly  at 
any  time  by  reckoning  only  from  the  highest  number 
marked  to  the  top  of  the  pile.  On  random  stock  these 
numbers  would  show  feet  instead  of  pieces.     This  will 

38 


apply,  of  course,  to  any  bin  in  which  the  material  is 
regularly  stacked,  or  to  any  other  merchandise  items 
which  can  be  so  arranged  in  stock  as  to  be 'taken  out  in 
a  predetermined  order.  On  items  such  as  saws  or  planes 
in  hardware  stock,  where  only  a  few  are  carried,  the 
record  can  be  dispensed  with  and  balance  on  hand  marked 
from  an  actual  count  of  the  articles.  With  the  numer- 
ical identification  suggested  certain  numbers  could  be 
.issigned  for  checking  up  each  day  to  see  that  the  stock 
record  agrees  with  the  actual  stock,  thus  keeping  the 
record  perpetually  in  line  and  doing  away  entirely  with 
the  fuss  and  bother  and  almost  inevitable  errors  of  the 
yearly  or  half  yearly  inventory. 

The  contributor  describes  a  lx6.-4-foot  dressed  board 
for  the  bin  record.  Such  a  piece  in  most  yards  is  worth, 
say,  4  to  7  cents;  a  weatherproof  card  costs  a  fraction 
of  a  cent,  and  is  better,  neater  and  could  be  used  for 
stock  items  where  there  would  be  no  room  for  the  board 
convenient  to  the  item  which  it  is  to  record.  A  form 
for  such  a  card  is  here  suggested  CFig.  5).  If  exposed 
to  weather  it  must  be  marked  with  indelible  lumber 
pencil  and  should  therefore  be  ruled  with  ample  spaces 
for  large  figures. 

On  the  form  shown  every  fifth  line  is  ruled  heavy. 
It  probably  would  serve  the  purpose  of  checking  the 
balance  and  save  labor  if  on  the  ticket  to  be  entered  on 
this  fifth  line  the  balance  were  noted  forward  and  on 
other  tickets  only  the  bin  number,  thus  giving  a  check 
balance  with  the  office  record  on  every  fifth  item.  In  the 
"In"  and  "Out"  columns  a  small  space  is  provided  for 
bringing  down  the  total  of  the  five  tickets  for  striking 
the  balance.  This  total  may  be  made  in  small  figures 
with  an  ordinary  lead  pencil,  being  of  only  transient  use. 


C^i^i7i^er  C/?f!(/c  J^oc/ 


Fig.  4.     Corner  of  Counter  ChecTc  BooJc,  fifty  numbered 
lines,  five  sets  of  columns  to  page. 


m.  HO.  ^  mii(%^^ 


Fig.  5.     Pile  Card,  about  5xlS  in.,  weatherproof   tag, 
printed  both  sides. 

New  balance  is  brought  down  to  "In"  column,  so  only 
the  five  new  lines  need  totaling  for  next  balance. 

The  forms  submitted  show  a  duplicate  order  sheet  and 
a  duplicate  sales  ticket,  which  is  not  made  until  the  yard 
order  is  filled  and  returned.  Often  the  sales  ticket  is 
made  in  triplicate,  the  third  copy  being  provided  for  a 
driver's  receipt.  This  is  ingeniously  avoided  here  bj  a 
perforated  stub  to  be  signed  by  the  customer  and  de- 
tached from  the  ticket  that  is  left  with  him,  being  iden- 
tified with  it  by  the  number  and  requiring  no  extra 
writing.  Some  of  our  friends  are  making  the  sales 
ticket  and  its  copies  act  also  as  the  yard  order,  and 
would  object  to  the  double  writing  a  separate  yard  form 
involves.  The  order  form  could  easily  be  dispensed  with 
and   still   without   the   bother    of   making   a   triplicate. 


Let  the  duplicate  have  the  extra  columns  required  for  the 
stock  record  and  hold  the  original  until  the  duplicate  is 
brought  in  from  the  yard.  The  original  is  then  released 
to  go  to  the  customer,  together  with  the  receipt  stub, 
and  the  duplicate  then  becomes  the  office  record,  both 
for  money  posting  and  stock  posting. 

The  ticket  form  shown  carries  two  sets  of  numbers, 
"Book  1"  and  consecutive  "No.  2."  In  practice  this 
should  be  "No.  102,"  the  tickets  in  Book  1  beginning 
with  100  and  running  serially,  in  Book  2  with  200  etc. 
If  fifty  tickets  are  used  to  a  book,  the  numbers  should 
run  from  00  to  49  instead  of  from  1  to  50,  though  this 
is  more  important  if  the  numbers  from  50  to  99  are  also 
used,  as  in  the  flat  book  form  they  often  are  not.  Ticket 
300  should  be  the  first  ticket  in  Book  3,  not  the  last  in 
Book  2.  If  two  books  are  used  to  each  hundred  numbers, 
the  one  beginning  with  150  is  usually  known  as  Book 
IVa  or  150  or  IB. 

The  ledger  charging  is  done  direct  from  the  sales 
tickets,  and  as  each  is  handled  it  is  listed  on  the  "Coun- 
ter Check"  form,  which  accumulates  the  total  of  charge 
sales,  cash  sales  and  cash  on  account,  to  be  posted 
through  in  daily  total  to  the  respective  accounts,  balanc- 
ing the  individual  charges  to  customers.  But  one  writ- 
ing of  the  amount  for  each  ticket  is  necessary,  the  lines 
being  numbered  up  to  50  to  correspond  with  the  sales 


t^ 


Fig.  6.    Stock  Ledger  ruling  for  small  5x8  in.  loose  leaf 

ledger  for  branch  yard.    Mr.  Shaw's  sTcetch  showed 

wider  item  columns,  and  blanks  at  top 

for  credit  rating  and  limit. 

ticket  numbers.  There  are  five  of  these  sets  of  columns 
on  the  form  submitted,  taking  care  of  five  successive 
sales  books.  If  a  merchandise  distribution  is  wanted, 
the  sheet  could  be  arranged  for  as  many  classification 
columns  as  desired;  and  as  all  sales  go  through  these 
underscored  and  the  date  noted.  Quantities  short  or  over 
sheets  the  class  postings  could  go  direct  to  ledger  ac- 
counts and  only  a  single  column  for  merchandise  carried 
on  the  journal,  which  would,  of  course,  control  and  bal- 
ance with  the  distribution  merchandise  accounts  of  the 
ledger. 

The  stock  record  is  a  book  with  several  sets  of  columns 


^tl?7-ri,m'ff  7Zy 


/ 


addU 


Sold  Bed 


<l4rt> 


(MdedJold 


xfAti'.j'.fr'-^T^i!> 


z 


/' 


Jco 


/■io 


Bal 


OddedSold 


f7' 


J 


/U. 


Sal 


'JefdeaSold 


<  /■i' 


4 


jBai. 


Idded-Soid 


9fM 


S 


^eil 


Std'k    Vici^ril.    I.nt.l.     fn 


S.'rJ-I.J    in. 


CASH     BOOK 

m 

fM          Wllf  UM. 

■' 

wtn 

•IKtikt 

..„ 

lU 

UllS  tFDO 

6i«tm 

filS 

-  1 

fiX.L 

21 

(rx^d.ft.^rv^^.y.. 

TO 

zo 

^^ijU 

V 

ot 

/N, 

,/-^ 

.^Ol^ 

y 

X, 

/ 

^^^■^^l 

-'  \ 

/ 

s, 

^^^ 

/^'^ 

_^^^           ^"*^w 

^ 

^ 

LJ                      v^          -v 

k/ 

\J 

U\->^ 

■M 

,^^    ^ 

■^     ^  l^ 

^.^ 

Vig.  7.    Cashbook  form,  debit  and  credit  sides  separated. 


S9 


to  the  page,  one  for  each  stock  item  in  numerical  order. 
Apparently  each  item  is  posted  direct  from  the  ticket, 
which  fills  the  stock  record  rather  rapidly.  The  second 
prize  system  used  distribution  sheets  to  take  the  sales 
ticket  amounts  and  only  the  weekly  totals  went  to  the 
stock  records  cards.  It  is  desirable  to  have  an  addi- 
tional column  in  which  to  record  car  numbers,  on  pur- 
chases, or  order  numbers  if  numerical  purchase  orders 
are  used,  and  an  additional  column  for  unit  prices  paid, 
as  a  useful  running  record  of  cost.  Often  the  minimum 
quantity  to  allow  before  reordering  and  the  quantity  to 
order  are  also  noted  at  the  top  of  each  item.  If  the 
suggested  plan  of  periodical  checking  with  actual  stock 
is  adopted,  balances  which  have  been  so  verified  are  to  be 
on  inventory  should  be  noted  in  red  ink  as  a  plus  or 
minus  quantity  in  the  sold  column  (never  in  receipts) 
and  the  corrected  balance  extended.  If  it  seems  desirable 
these  can  be  put  into  the  regular  books  (at  cost  price) 
in  a  merchandise  short  and  over  account,  which  when 
closed  to  profit  and  loss  would  show  the  total  of  such 
discrepancies.  The  contra  debit  or  credit,  of  course, 
goes  to  the  merchandise  account  and  this  merely  segre- 
gates the  stock  discrepancies  from  the  general  merchan- 
dise results.  Stock  returned  should  also  be  entered  in 
the  sold  column  within  a  circle  to  indicate  a  reversed 
quantity,  as  a  subtraction  from  quantity  sold  rather  than 
in   bought   column   as   an   addition   to   quantity   bought, 


■-^^^j-joUo**  ^^K/^>*^^J^./l^^^.' 


Shop  Ticket  Hawkeye  Lumber  and  Coal  Co. 

F  AVENUE  BY  THE  DAM.  CEDAR  RAPIDS,  IOWA 


No.108j3 Name Job......... 

Date 191      Time  Cost:  L  $  M  $ 


Item 

Pieces    1     Thick          Wide 

1 

Long 

Feet 

Wd. 

Grade 

WORKING  DIRECTIONS 

1 

2 

^^_, 

L      ^_»— 

1 

rifl.   Ii.     simp  tickel,  1.5x10.5  inchei  long,  blank  numbered  dupHvate. 


which  it  is  not,  as  the  contributor  says. 

The  contributor  posts  directly  to  customer's  ledger 
account  and  makes  his  monthly  statement  from  it,  a  gen- 
eral practice;   but  an  improved  time-saving  method  has 


Who* 

No 

191... 

Where 

Whon 

Purchase  Orders  Nos ....for  items 

No 

\A/ ..«»«.!.                                    

Wk^n       Prrtm-''-"!-                                                                                                                                                    

Shop  Orders  Nos (or 

items 

Jc 

b 

No 

Read  back-     Yes No... 

Loaded  bv Driver 

1-all  loaded;        2 

— only —  loaded;         3— no  more  in  stock;        4 — to  be  ordered; 

5 — rush 

BIN 

NO. 
1 

PIECE? 

THICK 

WIDE 

LONG 

FEET 

GRADE 

WOOD 

CHECK           NO.,  NAME  OR  DESCRIPTION 

PRICE 

AMOUNT 

2 

,'i^^V/ 

. 

^   -  -' 

Uci-— 

^— —     ^ 

kiii;^ 

ki-^^- 

Kl— 

-V-'     ■ 

taw--*w    - 

■"" 

— .^ ^      .-i-i-^-v.    .--.... 

'           V~ 

^'~' 

already  been  described  in  previous  articles.  The  indebteil- 
ness  of  the  lumber  trade  in  general  to  Mr.  Shaw  for 
having  contributed  a  method  of  keeping  stock  that  is 
bound  to  work  if  given  a  half-way  fair  chance  is,  how- 
ever, a'  sufficient  halo  for  any  one  lumber  accountant. 

One  of  the  above  suggestions  involved  two  additional 
columns  on  the  sales  ticket  duplicate  to  take  the  stock 
entries,  doing  away  with  the  separate  yard  order  form. 
The  corresponding  space  on  the  original  or  customer's 
copy  would  be  dead  space.  The  original  might  be  that 
much  narrower,  but  to  make  sales  books  that  way  is 
much  more  expensive.  Mr.  Tessman  in  his  customer's 
invoice  used  the  left  margin,  which  on  the  original  and 
triplicate  was  needed  as  a  binding  margin  for  the  post 
binders,  for  a  well  worded  printed  reminder  of  the  terms 
of  settlement,  and  this  plan  could  well  be  followed  in 
arranging  the  form  suggested,  or  the  customer's  detach- 
able receipt  described  by  Mr.  Shaw  could  be  well  ar- 
ranged for  this  space. 


HAWKEYE  LUMBER  &  COAL  CO. 

F.  AVE.  BY  THE  DAM 


JOHN  W.BARRY 

PRES. 
Res.  1448 


W.  H.  McCLINTOCK 

SEC.  &  TREAS. 
Res.  2004  Block 


PHONE 

769 


Cedar  Rapids,  Iowa 


Fig.  1.     Telephone  sMp  or  order,  6x8  inches  wide,  in  pads,  no  duplicate. 

40 


A  Complete  Set  of  Numbered  Blanks  for 
Initial  Records — A  Useful  Shop  Ticket 
for  Planing  Mill  Work— How  the  Stock 
Record  Is  Kept — Miscellaneous  Kinks. 

SYSTEMS    OF    THE    HAWKEYE    LUMBER 
AND  COAL  COMPANY. 

It  might   be   anticipated  that   two   such   methodical 
gentlemen  as  those  connected  with  "Hawkeye  by  the 


Dam,"  Cedar  Eapids,  Iowa,  would  have  a  systematic 
oiBce  system;  and  a  couple  of  days  recently  spent  with 
John  W.  Barry  and  W.  H.  McClintock  developed  some 
interesting  information  regarding  their  ways  of  doing 
business. 

Fig.  1  herewith  shows  the  printed  form  which  is  put 
up  in  pads  and  used  for  the  first  record  of  orders 
received  by  'phone  or  taken  at  the  counter.  In  many 
yards  the  first  printed  blank  is  the  duplicate  ticket; 
but  where  a  machine  is  used  it  is  obvious  that  orders 
taken  by  'phone  will  in  most  cases  be  jotted  down 
as  a  memorandum  and  transferred  to  the  ticket  later. 
The  form  here  shown  serves  to  record  this  initial 
memorandum  in  a  complete  way  with  about  half  the 
writing  that  otherwise  would  be  required.     It  will  be 


Fig.  e.     Stock  card,  standard  size  5x8  inches  wide. 


Original 


JOHN  W   BARRY 
Ret.  New,  Itm  Blue;  Oid.  54  L-3 


Sold  and 
Delivered  to. 


New  Phone  "$9 
Old  Ptaeoe  iiA  L-l 


Date. 


W.  H.McCLINTOCK 

Res.  Phone  Old.  4:3  L'3 

Kes.  Pbone:  New,  lOtl  Wtiite 


.19_ 


On  the. 
At  No,_ 


.Job 


.N.  S,. 


OnE,  W  N.S.sldeot. 


-St.  Ave.  bet.. 


.St.  Ave.  E.  W. 

Sl.Ave  E.W. 


By  the  Hawkeye  Lumber  &  Coal  Co. 


Load  Ticket  No.. 


F  Ave.  by  the  Dam: 

Cedar  Rapids,  Iowa 

Loaded  by 


Amount: 

$ 

LP. 


LP.. 


TERTMS:  Casti,  unless 
otherwise  agreed.  Past 
doe  accoonis  will  draw 
eight  per  cent      MT      W 

No.  A  2306 


.  Driver. 


Extended  by. 


.  Stocked  by. 


I'ig.  2.     Customer's  invoice,  quadruplicate  machine  ticket,  6.5x3  inches  long. 

41 


noted  also  that  it  provides  for  cases  where  some  of 
the  goods  must  be  ordered  in,  or  some  must  be  pro- 
duced on  a  shop  ticket  in  the  planing  mill. 

Fig.  2  represents  the  customary  duplicate  invoice  or 
ticket.  In  this  system  four  copies  are  made,  providing 
two  complete  office  files,  one  of  which  is  filed  nu- 
merically and  forms  the  sales  book,  the  other  being 
sorted  and  filed  alphabetically  by  customers.  This 
ticket  form  is  very  complete  and  of  generous  size,  so 
it  would  be  less  likely  to  be  lost  by  the  customer. 

Cash  sales  where  the  customer  takes  away  the  goods 
are  noted  on  a  blotter  instead  of  ticketed  as  they 
occur,  and  at  the  end  of  the  day  a  cash  ticket  is 
made  on  the  machine  to  cover  all  of  them.  Cash  sales 
for  delivery  by  wagon  are  recorded  on  the  ticket 
machine.  At  the  end  of  the  day's  business  charge 
tickets  are  listed  on  the  adding  machine,  posted  direct 
from  ticket  to  ledger,  a  similar  total  is  made  for  cash 
sales  and  the  totals  only  are  entered  to  the  journal, 
a  columnar  book  of  form  very  similar  to  some  already 
described.  .      > 

The  ledger  used  is  a  very  convenient  one — two,  in 
fact,  being  used — a  large  paged,  permanently  bound 
book  for  private  accounts,  wholesale  or  jobbing  sales 
etc.,  and  a  looseleaf  ledger  for  customers'  accounts. 
Both  have  the  very  convenient  index  feature  whereby 
the  index  tab  opens  to  index  pages  ruled  crosswise 
into  sections  about  %-inch  deep,  each  section  having 
its  own  thumb  notch  in  the  margin.  One  to  four  or 
five  names  may  be  written  in  each  section,  and  the 
thumb  notch  will  open  the  book  at  once  to  the  ledger 
pages  on  which  all  these  accounts  appear,  or  it  may  be 
where  there  are  several  accounts  recorded  in  this  index 
section  that  some  of  them  will  be  on  the  next  following 
page.  At  any  rate,  two  motions  quickly  performed  will 
open  either  ledeer  to  any  desired  acooiiTit  without  any 
hunting  of  pages,  saving  about  half  the  time  in  posting. 

The  invoice  form  is  twenty-five  item  lines  in  length, 


but  has  been  redrafted  so  that  the  next  lot  ordered 
will  be  turned  the  other  way  and  be  wider  than  they 
are  long,  and  will  have  the  margin  for  binding  at  the 
left  instead  of  at  the  top,  a  somewhat  more  convenient 
arrangement.  Each  day's  numerical  tickets  as  filed 
away  have  the  adding  machine  summary  on  the  front, 
agreeing  with  the  journal  entry.  The  numbering  serves 
to  check  missing  tickets;  Mr.  Barry  tore  off  the  sample 
set  from  which  the  figure  was  made  while  Mr.  Mc- 
Clintock  was  out  of  the  oflSce,  and  along  in  the  after- 
noon the  latter  gentleman  started  inquiries  as  to  what 


Fig.  7.     Stock  card  like  Fig.  6  except  that  it  i»  intended  for  smaller  unit  quantities. 


JOHN  W.  BARRY,  PreiMwit 


W.  H.  McCUNTOCK,  Secjr.  and  Trau. 


Cedar  Rapid*,  Iowa 


ORDER  NO. 


955 


.190- 


TO- 


AT_ 


PleoK  Ship,  Via  C.  4  N.-W.  R.  R.  or  C»r«  of  C.  *  N..W.  at  fint  Interchanging  PoJnt, 

To  HAWKEYE  LUMBER  &  COAL  CO.  (inc.) 

CEDAR  RAPIDS,  IOWA 


Whea 


Term*  Regular 


-ton*  of- 


_CoaI  at  $- 


-per  Ion  F.  O.  B._ 


If  anjthiag  in  above  »uggeftU  an  error  on  our  part,  pleaae  kindly  call  attention  to  tame  before  thipment. 

Very  truly, 

HAWKEYE  LUMBER  &  COAL  CO. 


By- 


Fig.  S.     I'urchase  order,  8.5x11   inches   loTig,  blank  numbered   duplicate,   book  bound,  original  perforated  to  tear  out. 

42 


had  become  of  that  particular  ticket,  having  missed 
it  in  his  round-up. 

Fig.  3  shows  the  order  blank  which  is  used  for  the 
giving  of  all  orders.  It  is  very  similar  to  forms  used 
by  others,  but  comparatively  few  retailers  have  their 
own  forms,  relying  instead  upon  the  salesmen  to  record 
the  orders  and  furnish  them  a  copy.  Having  your  own 
series  of  order  numbers,  however,  tends  to  better  sys- 
tem, and  it  will  be  noticed  that  these  are  serially 
numbered. 

Fig.  4  represents  a  form  which  has  not  hitherto 
been  presented,  a  shop  order  upon  which  all  work  in 
the  planing  mill  is  done.  This  form  also  has  its  own 
series  of  machine  numbering.  The  front  gives  working 
instructions,  and  the  back  is  arranged  to  serve  as  a 
record  of  material  and  of  machine  time  and  bench 
time  used  upon  the  job,  thus  accumulating  systematic 
information  upon  which  simijar  jobs  may  be  figured 
in  future.  Fig.  5  shows  in  skeleton  the  back  of  the 
same  form.  In  the  summary  on  the  face  of  the  ticket 
at  the  top  machine  time  and  bench  time  are  figured 
together  to  produce  the  "L  Cost"  (labor  cost).  The 
"M  Cost"  is,  of  course,  for  material  used. 

A  novel  and  useful  card  index  stock  record  is  used, 
two  forms  of  cards  being  used,  as  indicated  by  Figs. 
()  and  7.  The  first  is  intended  largely  for  feet  quan- 
tities and  for  larger  amounts  of  piece  count,  and  the 
second  is  used  for  doors,  sash  and  many  miscellaneous 
items  in  which  the  stock  quantities  run  in  small  num- 
bers. Where  there  are  many  progressive  sizes,  as  in 
dimension,  sash  etc.,  several  sizes  may  bo  recorded  on 
the  same  card  in  successive  columns,  thus  condensing 
the  record.  A  very  complete  set  of  guides  is  used, 
consisting  of  colored  guides  with  wide  tabs  for  main 
divisions,  a  second  set  of  distinctive  color  for  subdi- 
visions, and  the  tabs  on  the  individual  cards,  which 
occupy  progressive  positions,  are  marked  with  the  size 
etc.  which  that  card  shows. 

This  stock  record  is  posted  direct  from  the  sales 
tickets  and  purchase  order  invoices.  The  two  columns 
carry  totals  only.  If  the  sold  column  shows  842  and 
seven  units  of  this  kind  are  sold,  instead  of  setting 
down  the  7  it  is  added  mentally  and  set  down  849,  the 
progressive  total.     To  get  the  balance  on  hand  at  any 


STOCK  USED  ON  ORDER  NO.         1082 

Item 
No. 

Pieces 

Thick 

Wide 

Lont 

Feel 

Wood 

Grade 

Bin 

Pal.  No. 

WORKGri  FOR 

I'ig.  5.    Back  of  shop  ticket  with  16  lines  for  recording  maioial  and  7  Unei  each  for  recording  machine  and  bench  time.' 


time  subtract  the  out  total  from  the  in  total.  Another 
way  to  handle  this  within  the  space  of  two  columns 
would  be  to  use  the  first  column  for  quantities,  dis- 
tinguishing "  in  "  quantities  by  inclosing  them  in  a  circle, 
and  use  the  second  column  for  a  running  balance  on 
hand.  In  a  dimension  item  there  might  be  half  a  dozen 
or  more  sales  a  day;  the  separate  items  could  be 
recorded  in  the  first  column,  then  added  mentally  and 
the  total  deducted  from  the  balance  to  bring  the  new 
balance  on  hand  down  opposite  the  last  item,  thus 
avoiding  making  a  separate  calculation  for  each  entry. 
This  record  is  kept  up  daily,  and  as  certain  stocks 
get  low  they  are  checked  up  with  the  card  and  a  red 
ink  adjustment  made  for  any  difference  between  book 
and  actual  quantities.  The  cards  only  take  up  eight  or 
nine  inches  in  depth  in  a  single  drawer  which  is  stored 
nightly  in  the  vault  and  in  case  of  fire  would  furnish 
an  inventory  which  would  facilitate  insurance  adjust- 
me.Bt. 

John  W.  Barry  is  the  author  of  a  stock  estimate  book 
which  is  widely  used,  so  no  explanation  of  this  form 
is  needed  here.  On  the  first  delivery  on  an  estimate 
it  is  the  custom  here  to  charge  up  the  entire  amount, 
and  succeeding  delivery  tickets  on  that  job  will  be 
made  in  quantities  only  and  not  extended  as  to  price, 
except,  of  course,  for  extras. 

A  9-column  adding  machine  is  one  of  the  office  fix- 


tures that  is  found  exceedingly  useful,  and  in  almost 
any  lumber  office  it  would  pay  a  handsome  profit  on 
the  investment.  A  letter-printing  device  is  used  for 
sending  out  imitation  typewriter  circular  letters.  A 
stencil-making  machine  is  used  for  addressing  ship- 
ments, and,  incidentaUy,  this  machine  is  put  to  a  novel 
advertising  use.  With  the  first  shipment  sent  out  on 
a  job  there  is  sent  out  a  piece  of  half-inch  board 
lettered  in  the  style  shown  in  Fig.  8.  The  contractor, 
of    course,    nails    this    up    to    advertise    himself,    and 


"Hawkeye  by  the  Dam"  comes  in  for  its  share  of  the 
ensuing  publicity. 

In  taking  his  monthly  trial  balance  Mr.  McClintock 
uses  a  plan  which  is  not  new  but  probably  will  be 
new  to  many  readers.  He  first  goes  through  his 
ledger  and  on  each  account  to  which  any  entries  have 
been  made  during  the  month  lists  the  debit  entries  on 
the  adding  machine,  totals  them,  then  the  credit 
entries,  tears  off  the  slip  and  puts  it  in  the  ledger  for 
a  marker.  He  of  course  uses  the  trial  balance  book 
having  columns  for  a  year  with  one  writing  of  the 
account  names,  which  is  the  almost  universal  standard 
form.  He  now  goes  through  the  ledger  and  brings  into 
the  new  trial  balance  columns  the  totals  for  the  marked 
accounts,  at  the  same  time  taking  out  the  markers  and 
laying  them  in  a  pile;  then  he  brings  forward  from 
the  previous  month's  trial  balance  the  footings  for 
the  other  accounts  (the  ones  which  have  not  changed) 
and  takes  his  balance. 

If  it  does  not  come  the  first  time  he  takes  his 
marking  slips  and  totals  all  the  debits  on  the  adding 
machine  and  compares  them  with  the  debit  side  of 
the  customers'  column  in  the  journal.  As  he  carries  his 
journal  footings  forward  by  totals  instead  of  by  bal- 
ances the  debit  footing  should  of  course  agree  with 
the  total  of  debit  postings  during  the  month  to  the 
ledger,  and  the  same  should  be  true  of  the  credit  post- 
ings. If  either  should  not  agree,  as  shown  by  this 
totaling  of  the  marker  slips,  it  is  necessary  only  to 
check  postings  from  the  journal  to  that  side  of  the 
ledger  accounts  to  see  where  the  error  occurred,  in- 
stead of  checking  over  both  debit  and  credit  items. 
In  his  prize-winning  contribution  to  the  retail  book- 
keeping contest  Gus  H.  Tessman  (April  1,  p.  38)  de- 
scribed a  slightly  different  method  of  applying  the 
■  same  principle. 

On  the  stock  record  cards  reference  will  be  found  to 
"Bin  No."  Every  bin  and  pile  throughout  the  yard 
is    successively   numbered   and   it    is    this  number   to 


r.iMu:ii]-[:ni\'TRy\(:Tnn 

MILL    WOHK    VmM 
MAWKHYH   HY   THU   WW 

Pig.  8.     Sample  tign  intoripiion  fumithed  contractor  to  dUplay  at  the  fob. 


43 


which  reference  is  made.  The  Hawkeye  method  of 
storing  and  caring  for  its  stock  is  very  complete  and 
comprehensive,  but  this  belongs  to  yard  system  rather 
than  ofBce  system,  which  is  the  subject  here  under 
consideration. 


A  set  of  carefully  worked  out  forms  such  as  have 
here  been  described  not  only  assist  in  preserving  a  set 
business  routine  but  actually  save  much  labor  because 
they  serve  to  describe  a  transaction  with  much  less 
writing  than  is  necessary  otherwise.    They  are  actually 


a  double  economy,  saving  labor  both  in  making  the 
record  and  in  its  subsequent  use,  as  the  particular 
information  needed  at  any  time  always  appears  in  its 
appointed  place  and  it  is  not  necessary  to  read  the 
entire  sheet  in  order  to  find  it. 


L.  I..  Selbel,  Free., 
Badger  Lumber  Co», 
Kansas  City,  Mo» 

Dear  Sirx- 

Tour  favor  of  the  6th,  relative  to  the.Anerican  "Lm.- 
herman  received. 


The  writer  has  been  reading  the  American  luiribernan 
almost  from  the  time  of  its  first  publication.  I  consider  it  the 
best  IJiurbGr  Journal  in  the  World  today,  and  do  not  feel  that  I 
could  keep  house  or  run  a  lumber  yard  successfully  without  it. 

It  is  worth  all  it  costs  to  any  merchant.  We  certainly 
want  it  to  come  right  along  every  week.  The  man  who  does  not  get 
anything  out  of  it  is  the  man  who  never  breaks  the  wrapper,  and 
the  man  that  lets  this  magazine  come  into  his  office  and  never  looks 
into  it  cannot  be  a  very  enthusiastic  lumberman. 

Yours  truly, 


rx>-f^. 


44 


COST  SYSTEM  FOR  A  RETAIL  YARD. 


TUB  general  subject  of  "Costs"  is  one  that  has  lately  been 
ffiven  a  great  deal  of  prominence  and  attention  In  all  lines 
or  business. 

It  may  seem  that  much  of  the  system  presented  herewith 
Is  Inapplicable  to  your  business,  and  you  may  say  "red 
tape."  No  matter  how  simple  a  method  or  system  may  be 
Its  description  on  paper  Invariably  appears  more  complex 
and  cumbersome  than  it  proves  in  actual  application  ;  further- 
more the  installation  of  new  methods  such  as  I  shall  describe 
Is  an  art  in  itself,  requiring  not  only  comprehension  of  the 
outlined  scheme,  but  also  considerable  sIjIU,  tact  and  broad- 
ness of  mln(l  Many  good  and  valuable  methods  have  turned 
out  failures  owing  to  incorrect  Installation,  lack  of  concen- 
tration, or  failure  to  introduce  such  modification  as  the 
actual  working  out  in  practice  demanded. 

The  general  principles  that  I  shall  deserioe  can  in  a  great 
many  cases  be  introduced  and  carried  out  in  your  business 
without  the  addition  of  any  considerable  number  of  clerks, 
and  by  this  I  mean  without  the  addition  of  more  than  two 
and  in  some  cases  only  one  assistant  to  your  present  book- 
keeping force. 

The  ramifications  In  the  buildipg  supply  business  are  so 
numerous  I  need  not  try  to  enumerate  them ;  but  the  funda- 
mental principles  of  cost  finding  are  the  same  the  world 
over  and  what  I  desire  to  do  is : 

<1)  Outline  these  fundamental  principles  underlying  all 
costs. 

(2)  Show  by  means  of  a  tew  simple  forms  how  such 
principles  can  be  followed  out  in  the  building  supply  business. 

(3)  Give  In  more  or  less  detail  the  cost  system  used  by 
the  Charles  Warner  Company,  and  show  how  the  facts 
brought  out  by  the  system  have  been  used  to  Increase  our 
net  profits.  And  when  all  is  done  and  said,  that  is  the  real 
object  of  our  being  in  business  and  one  of  the  main  reasons 
why  we  as  an  association  are  here  today. 

In  the  first  place  you  must  agree  with  me  that  the  man 
who  devotes  his  capital  and  life's  energy  to  any  business  has 
the  right  to  expect  and  demand  certain  returns  from  that 
business  to  which  he  Is  devoting  himself.  Let  us  try  to 
figure  out  what  a  satisfactory  return  should  be. 

From  the  opinions  of  many  men  In  the  business  I  think 
we  win  be  safe  in  assuming  that  a  normal  net  profit  of 
from  12  to  15  percent  on  gross  sales  should  be  considered 
a  fair  one.  This,  of  course,  is  in  a  well  established  business 
dealing  in  staple  commodities  that  are  not  protected  by 
patents. 

In  view  of  the  relation  between  capital  involved  and  gross 
sales,  this  means  that  we  should  expect  a  return  of  from  17 
to  20  percent  on  the  capital  Invested ;  since  through  natural 
Investment  channels  capital  can  earn  5  percent  without 
business  risk. 

Let  us  compare  these  figures  with  the  facts  as  they  exist 


[By   WiLLiA-M   A.  JOKDAN,  Wilmington,   Del.] 

in  our  business  today,  and  I  think  you  will  admit  that  there 
Is  a  necessity  of  some  radical  action  to  remedy  the  condi- 
tions. But  before  we  can  remedy  the  conditions  we  must 
first  find  out  the  conditions. 

Admitting  for  the  sake  of  an  argument  that  taken  as  a 
whole  our  business  has  returned  the  necessary  17  or  20 
percent  on  the  capital  invested,  how  many  of  us  know  what 
particular  department  has  contributed  to  this  earning  or 
what  one  has  helped  to  hold  it  down  ? 

Not  once  but  a  score  of  times,  in  my  professional  work, 
I  have  found  that  the  losses  of  one  department  were  being 
paid   from   the   profits   of  another.      Taken   as   a   whole,   the 


::T"oi    \ 

:v....  '/9i     .// 

r.:;r~^i/o 

I^aata                                   •• 

r."r  "<?■!«'» 

^    CdL^,^^    ^,^fc-^«*t3/    (^t**^"^ 

J^4/ 

— -„       in?...  ^^    .,.\-T^s&ro_ 

'^<!<3 

Fig.  1.    Bequisition  for  Stock. 

condition  of  the  business  might  be  satisfactory  or  it  might 
not,  but  the  deplorable  fact  remained  that  upon  the  installa- 
tion of  proper  cost  methods  with  an  analysis  of  sales,  these 
conditions  were  found  to  be  a  fact.  Under  certain  circum- 
stances It  might  be  possible  that  this  state  of  affairs  would 
necessarily  prevail,  and  certain  materials  would  have  to  be 
handled  at  a  loss.  But  my  contention  is  that  whatever  this 
loss  amounts  to  it  should  be  known  month  by  month  and 
action  taken  to  relieve  the  situation  and  to  place  all  de- 
partments of  the  business  on  a  profitable  basis. 

The  most  dangerous  competition  is  unintelligent  compe- 
tition, and  this  is  brought  about  very  largely  by  a  lack  of 
definite  knowledge  in  regard  to  costs.  First  in  Importance 
comes   the   necessity   of   each   individual    knowing   his   costs, 


both  as  a  whole  and  by  departments.  Secondly,  all  cost 
s-ystems  In  the  same  line  of  business  should  be  on  a  uniform 
basis.  If  one  man  figures  In  such  Items  as  depreciation  or 
Interest  on  his  mortgage  debt,  and  another  leaves  them  out, 
how  can  they  compete  intelligently^  and  how  can  we  have 
anything  but  ruinous  price  cutting"/  And  mind  you,  the 
lower  selling  prices  may  not  be  set  with  a  view  to  actually 
cutting  prices,  but  solely  on  account  of  not  having  an  ac- 
curate knowledge  of  what  It  costs  to  do  business. 

Someone  will  say,  "It  takes  clerks  to  run  a  cost  system 
and  we  can  not  afford  them."  I  say,  "You  can  not  afford 
not  to  have  them,  if  they  obtain  for  yoH  accurate  cost 
figures,  which  you  so  badly  need  and  without  which  you 
can  not  run  your  business  intelligently." 

I  will  venture  the  assertion  that  a  great  majority  of  you 
do  not  know  your  costs.  You  do  not  actually  know  in  the 
several  departments  of  your  business  whether  you  are  mak- 
ing a  profit  or  a  loss,  nor  do  you  know  the  amount  of  that 
profit  or  loss.  It  is  highly  probable  that  at  the  end  of  the 
year  you  may  know  that  the  business,  taken  as  a  whole, 
has  either  made  or  lost  money.  But  how  many  of  you 
know  month  by  month,  or  week  by  week,  what  the  business 
Is  earning  or  losing,  and  which  material  or  department  of 
the  business  is  contributing  the  loss  or  the  gain? 

These  are  strong  statements  and  exception  will  probably 
be  taken  to  them.  But  I  have  purposely  made  them  strong 
with  the  sole  desire  to  bring  you  to  a  realizing  sense  of  the 
necessity  which  confronts  you.  The  expense  of  an  additional 
clerk  or  two  necessary  to  obtain  this  information  amounts  to 
nothing  compared  with  the  results,  and  from  practical  ex- 
perience I  can  say  that  it  is  true  economy  to  obtain  them. 

I  know  of  at  least  half  a  dozen  national  associations  cov- 
ering the  larger  businesses  of  this  country  that  have  ap- 
proached this  "cost"  question  from  the  same  point  of  view 
that  I  would  urge  the  National  Builders'  Supply  Association 
to  approach  It,  viz. :  by  the  appointment  of  a  committee  to 
investigate  and  report  with  the  aid  of  professional  advice, 
on  the  adoption  of  a  uniform  cost  system  for  the  various 
members ;  and  wherever  this  has  been  adopted  it  has  been 
considered  by  ail  a  most  excellent  Investment. 

Elements  of  Cost. 

The  prime  elements  entering  Into  "costs"  are  quite  well 
understood  by  almost  everyone.  This,  of  course,  includes 
primarily  the  cost  of  the  materials  themselves  together  with 
the  freight  paid  to  get  them  to  their  destination.  The  labor 
and  expense  involved  in  unloading,  handling,  storing,  re- 
handling  and  teaming  are  also  quite  well  understood.  This 
in  many  cases  constitutes  the  extent  of  the  cost  system.  But 
in  addition  to  this  we  have  what  are  known  as  overhead 
charges  or  administrative  expenses,  which  in  a  great  many 
cases  are   not  so  well   understood.     And  If  they  are  under- 


45 


stood   they   are   not   properly   prorated  against   the   dlSEerent 
departments  of  the  business  so  as  to  show  true  costs. 

These  overhead  charges  include  such  items  as  taxes,  insur- 
ance, water  rent,  iight,  power,  £uel,  postage,  office  supplies, 
advertising,  telegrams,  telephones,  selling  expense,  dues  and 
donations,  clerks,  bookkeepers,  collectors,  breakage  on  mate- 
rials, losses  of  every  character  including  stock  stolen  or  sent 
out  and  not  charged,  allowances  for  returned  goods,  bad  ■ 
debts  etc.  to  infinity.  Added  to  this  comes  depreciation  on 
the  buildings  and  equipment,  also  rental  on  the  land  and 
buildings  at  the  same  rate  you  would  receive  if  renting  it  to 
others,  the  value  your  own  services  would  bring  if  hired  out 


to  others,  and  finally  interest  on  your  investment  at  the 
rate  you  could  loan  your  money  or  invest  it  through  safe 
business  channels  where  no  risk  whatever  would  be  involved. 
It  is  the  proration  of  these  overhead  charges  and  the  dis- 
tribution of  current  general  expenses  against  the  different 
departments  of  a  business  that  I  shall  attempt  to  describe 
for  the  suggestive  value  it  may  have  in  working  out  your 
own  problems  along  similar  lines. 

Manual  of  Operating  and  Expense  Accounts. 

In  order  to  properly  collect  and  segregate  charges  against 
the    (Jifferent    departments    or    materials    we    have    adopted 


1 


IS    «    IT     1»    1»     M     »■     '^     " 


■uareth  Oeawt  Oewp&ny, 


a**  "5    "e     2T     28     2«     30     3* 

5680 


C  670X 

roa 


ti: 


s 

1800 


2 
1200 


DUPLICATE   PURCHASE   ORDER 

HOT! 

«oae«  wtccivto  *■  ■ii.ow 


5680 


eHCCRIO  WITH  Tnt*,. 
•CNTTO  TRC*«.~. 

Nazareth  Cement  Company, 


•VMLiTT  e.  K.  txeiT  u  NOTio  on 

■ACfi  o'  THi*  enoiR 


0  6701 
FCB 


m: 


PURCHASING 
DCPARTMCNT 


^i^mU^  Ift^ntfr  ^itt|mtt^« 


5680 


Mazarath  Camant  Compimyp 


0  6701 
ICB 


yftgarflth, 


Ja^ 


0-400 

WILMINGTON,  DtL., 
DATE  1/24/11. 


SHIP  TO  CHiVRLCS  WARNER  COMPANY  AT 

^ITllmlngton  Ratal!      nxm         Wilmington.  Pelaware.vi*     P. R. R. 


B 

1200 


DESCRIPTION 


Oms  KAZAHETH  ORHENT  III  DUCK  OOHTAIHIHO 
BAOS 


WAIITBD  BY  yjBRUARY  let. 


INSTRUCTIONS 

IM    aCKnOWlCDCMlMT   BTATC    BCriNITC    OIUVINt    D«Tl 

kCKhOWLIDaK  BV  OWN  ONDtn   NUMBER 

BIND   BILL^   IN   DUPLICATE   lO  WUHINDTON.  rCLAW*"^ 

BBND  BCPllNATt  BtLLB  iMMIDIKTCi*   roA  EACH  ONOCB  NUMBEB 

TM;B  ONOEN  WUBT   not  be  tilled  *T  •   HIBHEB   NATE   TNAN  LABT  OWOTC6. 

•MENAT    TNEICHT  TO   ...    NlANTB  WMETHE"    'OB    SM.NTINO   NOINT  ON   NlANT 


CHAfAeS   WARNER   COMPANY 


c^l^^CW 


Fig. 


Purchase  Order. 


what  we  call  a  manual  of  operating  and  expense  accounts. 
This  is  simply  to  facilitate  our  work  in  distributing  ex- 
penses for  supplies,  material  and  labor  against  the  proper 
department.  In  a  small  business,  distribution  of  expenses 
can  very  well  be  kept  track  of  by  name,  although  even  in  a 
business  of  small  volume  I  believe  a  numerical  system  of 
expense  account  numbers  can  be  used  to  advantage. 

In  our  particular  case  we  have  several  manufacturing 
plants  and  retail  yards  and  it  becomes  necessary  to  designate 
each  plant  or  yard  by  a  letter.  In  the  case  of  our  Wilming- 
ton retail  yard,  the  cost  system  of  which  I  shall  describe, 
this  designation  is  the  letter  "G."  This  manual  of  expense 
accounts  is  printed  and  placed  in  the  hands  of  all  foremen 
and  clerks  who  may  have  occasion  to  use  it. 

The  general  expenses  of  the  yard,  such  as  superintendent, 
clerks,  watchman,  office  expense,  minor  injuriesr  repairs  to 
wharves,  railroads,  fences,  sewers,  water  mains,  driveways, 
pavements  etc.,  are  each  designated  by  numbers  from  G-1 
to  G-10. 

For  example,  on  the  payroll  sheets  the  salary  of  the  super- 
intendent is  charged  to  G-1.  A  requisition  on  the  storeroom 
for  a  bottle  of  ink  is  charged  to  G-3,  office  expense,  while 
repair  bills  that  might  be  incurred  in  repairing  the  wharves 
are  charged  to  G-lS.  This  enables  us  to  tell  month  by  month 
how  the  general  expense  is  running  in  its  various  subdivi- 
sions, and  also  what  the  total  amount  of  general  expense 
amounts  to  each  month. 

This  general  expense  in  turn  is  prorated  over  the  ten  or 
twelve  productive  departments  (materials)  on  a  percentage 
basis  based  upon  the  volume  of  business  as  shown  by  gross 
sales.  This  is  on  the  asumptioh  that  a  department  doing 
twice  the  business  of  another  should  bear  twice  the  amount 
of  the  general  expense,  such  as  I  have  enumerated. 

Expense  accounts  G-11  to  G-20  cover  the  selling  expenses 
of  the  business,  such  as  salesmen's  salaries  and  expenses, 
advertising,  dues  and  donations,  rent  of  city  brancli  office  etc. 

The  group  from  G-21  to  G-30  includes  fixed  charges,  such 
as  taxes,  insurance,  interest  on  investment,  depreciation  etc. 
(The  distribution  of  these  fixed  expenses  will  be  taken  up 
in    detail   later   on.) 

The  numbers  from  G-.31  to  G-40  include  the  various  ex- 
pense items  in  connection  with  our  automobile  delivery 
trucks ;  while  the  numbers  from  G-41  to  G-50  take  care  of 
our  sundry  teamage  expense,  such  as  repairs  to  stables,  re- 
pairs to  wagons,  repairs  to  harness,  shoeing  and  doctoring 
horses,  feed,  and  bedding,  supplies  and  sundries,  labor,  per- 
centage of  general  expense  (as  noted  above),  percentage  of 
fixed   expense   etc. 

Productive  Departments. 

After  these"  general  nonproductive  or  expense  groups  come 
about  ten  or  twelve  different  groups  of  materials  which  form 
classes  by  themselves  and  are  what  we  call  the  productive 
departments  of  the  business.  These  are  divided  in  general 
into  such  materials  as  sand,  mortar,  plaster,  anthracite  coal, 
bituminous   coal,   building   brick,   pipe   and   tiling,   fire   brick 


46 


and  fire  clay  etc.  Materials  such  as  cement,  barrel  lime, 
hard  wall  plaster,  building  lime  etc.,  are  in  a  group  by 
themselves  in  a  covered  warehouse  or  lime  tanks. 

In  general  these  operating  accounts  run  as  follows,  taking 
for  example  the  material  "sand  :" 

G-61.     Repairs — Labor  ;  all  repairs  to  unloading  equipment. 

62.  Repairs — Material ;  all  repairs  to  unloading  equip- 

ment. 

63.  Power  and   light. 

64.  Supplies  and  sundries. 

65.  Direct  labor — Productive. 

66.  Percentage  of  general  expense. 

67.  Percentage  of  fixed  expense. 

68.  Cost  of  material  alongside  wharf. 

69.  Teamage. 

70.  Selling  expense   (proportion). 

This  list  of  expense  account  numbers  is  uniform  in  all 
departments   and   in    all   yards.      That   is   to   say,    the   labor 


UP..T 

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Fig.  3.     Inventory  Card. 

account  number  in  all  cases  ends  in  "5"  and  is  always  65, 
75,  85  etc.,  while  different  yards  are  differentiated  by  means 
of  letters. 

The  accounts  so  far  described  are  all  operating  or  expense 
accounts.  Beginning  with  G-400  we  have  what  we  call  our 
capital  or  asset  accounts,  such  as  stock,  stores,  land,  build- 
ings, railroad  tracks,  machinery,  equipment,  horses  and 
wagons,  furniture  and  fixtures  etc. 

I  have  gone  into  this  matter  of  our  manual  of  account 
numbers  at  such  length  because  it  forms  one  of  the  funda- 
mental principles  upon  which  the  entire  cost  finding  system 
is  based.  It  enables  the  timekeepers  or  foremen  to  know 
exactly  where  to  charge  all  labor  costs ;  it  enables  us  to 
charge  all  supplies  exactly  where  they  belong.  By  placing 
these  numbers  on   requisitions  for  matefiai,   the  bookkeeping 


department  is  able  to  properly  distribute  the  bills  coming  in 
against  the  department. 

It  not  only  forms  the  basis  of  cost  finding  methods,  but 
it  enables  us  to  compare  month  by  month  the  expenses  in- 
curred by  any  particular  number  or  group^  of  numbers,  and 
also  to  find  the  expense  per  ton  or  per  unit  on  any  material 
that  we  desire.  All  materials  are  reduced  to  a  tonnage  basis 
and  delivery  and  other  costs  figured  on  this  basis. 

A  team  record  is  carefully  kept  showing  the  number  of 
hours  teams  are  employed  on  any  particular  material  and 
the  entire  stable  expense,  as  shown  by  the  account  numbers, 
is  carefully  prorated  over  the  different  materials  in  pro- 
portion to  the  horse  hours  consumed  by  each  one. 

Bec(uisition  for  Stock. 

All  requisitions,  either  for  stock  chargeable  to  account 
G-400,  or  for  supplies  to  be  carried  in  the  storeroom,  are 
made  in  duplicate  on  the  purchasing  department  on  the 
form  shown  in  Fig.  1.  After  being  O.  K.'d  by  the  superin- 
tendent, the  original  comes  to  the  purchasing  department 
which  places  the  order,  and  the  duplicate  remains  filed  in 
the  yard  office  to  be  used  by  the  superintendent  or  chief 
clerk  In  following  up  or  urging  the  purchasing  department. 

Purchase  Order. 

The  purchase  order  as  shown  in  Fig.  2  consists  of  three 
parts ;  the  original  which  goes  to  the  seller,  the  duplicate 
which  goes  to  the  man  making  out  the  requisition  and  acts 
as  a  receiving  slip,  and  the  triplicate,  a  standard  5x8  buff 
colored  card,  which  Is  used  by  the  purchasing  department 
in  following  up  deliveries.  The  original  contains  a  number 
of  instructions  at  the  bottom  which  do  not  need  to  go  on 
the  duplicate  or  triplicate,  and  is  therefore  made  6x8.  tt  is 
also  designed  to  go  in  an  outlook  envelope.  The  duplicate  Is 
perforated  at  the  left  so  that  the  figures  showing  the 
quantity  ordered  may  he  torn  off  before  going  to  the  receiving 
clerk.  This  necessitates  his  counting  or  weighing  the  ma- 
terial very  carefully  and  inserting  this  quantity  on  the  dupli- 
cate before  returning  It  to  the  purchasing  department.  The 
triplicate  has  the  numbers  of  the  days  across  the  top  and  a 
clip  placed  at  any  particular  day  shows  the  clerk  that  this 
material  should  be  followed  up  on  that  date. 

The  original  requisition  has  on  it  the  account  number  to 
which  this  material  should  be  charged  and  this  in  turn  is 
transferred  to  the  order.  In  checking  up  invoices  this 
enables  the  clerk  to  place  this  account  number  on  the  bill, 
thus  Insuring  the  proper  distribution. 

Perpetual  Card  Inventory. 

A  perpetual  card  inventory,  reproduced  in  Fig.  3,  is  kept 
of  all  stock  on  hand.  This  also  acts  as  a  record  of  average 
cost  prices  and  shows  the  amount  of  material  bought  of  any 
particular  firm  in  a  given  length  of  time. 

One  very  useful  feature  of  this  record  is  that  it  shows 
the  minimum  quantity  that  should  be  held  in  stock  at  any 
time    and    the   number    of    units    to    order    when    the    stock 


reaches  this  minimum.  In  this  respect  it  is  practically  auto- 
matic and  there  is  no  danger  at  any  time  of  being  "out" 
of  some  good  selling  material. 

Another  feature  of  this  card  that  we  have  found  very 
useful  is  in  having  the  '  balance  available"  column  filled  out, 
even  though  the  material  itself  may  not  actually  have  been 
removed  from  stock,  if  it  is  already  called  for  on  orders, 
it  Is  not  available  for  future  use  and,  therefore,  the  column 
"Balaiice  available"  shows  the  true  condition  of  the  stock 
with  respect  to  this  particular  article. 

In  connection  with  our  perpetual  inventory,  it  might  be 
of  interest  to  state  that  the  accumulated  error  for  one  year 
beween  our  stock  record  cards  and  our  actual  physical  in- 
ventory was  slightly  over  one-t'liird  of  1  percenii 

Storeroom  Bequisitions. 

The  general  plan  of  having  a  requisition  for  obtaining  any 
material  is  followed  out  in  our  storeroom.  This  storeroom 
is  under  lock  and  key,  and  if  anyone  wants  miscellaneous 
supplies  for  use  about  the  yard  they  must  have  a  requisition 


RCOUISITION  NO. 


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Fig.  4.    Storeroom  Eequisition. 

(Fig.  4)  O.  K.'d  by  the  foreman  and  charged  to  its  proper 
account  number.  These  requisitions  are  deducted  from  the 
store  record  cards,  priced  and  filed  numerically  by  their 
account  number.  At  the  end  of  the  month  it  becomes  a 
simple  adding  machine  job  to  summarize  the  amount  of  the 
money  chargeable  to  the  various  account  numbers. 

Time  Books  and  Payrolls. 

Having  taken  care  of  the  material,  both  for  stock  and  for 
stores  to  this  point,  wo  now  come  to  the  recording  of  the 
labor  Item,  which  is  a  considerable  one.  Following  out  the 
same  general  idea  of  the  distribution  of  expense  and  labor 
to  various  account  numbers  as  descriljed  in  the  manual,  it 
becomes  necessary  to  have  a  payroll  system  adapted  to  tills 
use.  We  therefore  have  a  loose  leaf  payroll  sheet  as  shown 
In  Fig.  5.     Each  foreman  has  a  loose  leaf  book  in  which  he 


47 


carries  these  sheets  arranged  numerically  by  the  men's  num- 
bers. The  interesting  thing  about  these  payroll  sheets  is 
that  a  man  may  work  on  seven  dififerent  jobs  in  as  many 
different  departments  In  a  week  and  yet  have  his  time  dis- 
tributed day  by  day  or  hour  by  hour.  This  makes  the- 
weekly  work  of  distributing  the  payroll  to  the  proper  de- 
partments comparatively  simple. 

These  original  payroll  slips  are  not  copied  to  any  other 
payroll  book,  but  in  themselves  form  the  payroll.  They  are 
simply  summarized  by  account  numbers,  and  the  various 
labor  accounts  charged  with  the  total  amounts. 


OtPT.                                           NAMI 

NO. 

WCCK  tNOINO                                                                       ACCOUNT    NUMBERS                             | 

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f.^r^ 

Fig.  5.    Loose-Leaf  Time  Sheet. 


Thus  it  will  he  seen  with  very  little  effort  on  the  part  of 
the  foreman  the  time  of  each  man  about  the  yard  is  properly 
distributed  to  some  account  number,  and  the  payroll  sheets 
coming  into  the  office  in  this  form  greatly  facilitate  the  work 
ill   that  department. 

Pink  Slips. 

Fig.  6  shows  what  wo  call  our  "pink  slip."  This  is  really 
an  order  on  the  warehouse  or  yard  to  deliver  certain  mate- 
rials to  a  driver,  and  is  made  out  at  the  office  and  counter- 
signed by  the  foreman  in  the  department  where  this  material 
is  kept.  These  slips,  pink  in  color,  are  made  in  duplicate. 
The  original  is  O.  K.'d  by  the  foreman  and  has  marked  on 
it  the  weight  by  the  scale  clerk.  It  is  then  priced  and 
deducted  from  the  perpetual  stock  inventory  card,  after 
which  it  fjoes  to  the  customer  as  a  memorandum  of  that  par- 
ticular shipment,  and  Is  used  by  him  to  check  up  the  monthly 
bill  which  he  receives  later.  The  duplicate  forms  the  author- 
ity for  making  the  dally  charge  to  the  various  customers  on 
their  monthly  bill  and  statement  as  shown  in  Fig.  7. 

(For  B'igs.  6  and  7  see  pages  14  and  15.) 

The  monthly  bill  and  statement  is  sent  to  the  customer 
at  the  end  of  each  month,  while  the  duplicate  is  filed  an 
the  ledger  account  of  the  customer. 

Proportioning  Overhead  Charges. 

Having  taken  care  of  all  direct  expenses  such  as  repairs, 
supplies  and  sundries,  labor  etc.  we  come  to  a  consideration 
of  the  distribution  of  general  expense,  or  as  they  are  known, 
"overhead  charges." 

The  first  prorated  amount  is  that  of  general  expense  as 
called  for  by  account  G-236  in  Fig.  8.  These  expenses  con- 
sist of  the  superintendent,  watchman,  clerks,  office  expense, 
legal  expense,  minor  injuries  and  general  repairs  to  the 
driveways,  fences  etc.  In  other  words,  all  expenses  of  a 
general  operating  nature  which  can  not  be  directly  charged 
to  any  particular  department. 

There  is  no  hard  and  fast  rule  in  regard  to  the  basis  of 
distribution  of  this  general  expense.  In  our  case  we  took 
the  money  value  of  the  sales  in  the  ten  different  departments 
as  a  starting  point.  We  then  called  upon  the  different  men 
who  had  had  years  of  experience  in  the  business  and  asked 
them  If,  In  their  opinion,  this  percentage  represented  the 
proportion  of  general  expense  that  should  be  charged  against 
each  particular  department.  In  some  cases  this  percentage 
was  based  on  the  tonnage,  as  the  expense  was  not  in  pro- 
portion to  the  money  value  of  the  sales. 

This  is  a  point  which  each  one  will  have  to  determine 
for  themselves,  but  the  main  fact  to  be  remembered  Is  that 
this  general  expense  should  be  known  each  month,  and  each 
month  distributed  to  the  active  operating  departments  in 
some  just  and  equitable  proportion. 

It  will  be  seen  by  reference  to  the  cost  card  (Fig.  8)  that 
a  line  is  drawn  at  this  point,  and  the  expenses  to  here  form 
what  we  call  our  prime  cost.     It  is  to  this  point  that  the 


superintendent  of  the  yard  can  be  held  responsible,  but  he 
is  not  responsible  for  the  fixed  expenses  or  the  cost  of  mate- 
rials handled  which  go  to  make  up  the  total  cost. 

Account  number  G-237  shows  the  amount  of  fixed  charges 
against  the  departments.  By  "fixed  charges"  we  mean  the 
group  of  numbers  from  G-21  to  G-30.  This  includes  taxes, 
insurance,  depreciation,  interest  on  investment  and  salaries 
and  expenses  allowed  to  partners  or  officers  of  the  company 
(administrative  expense). 

The  amount  of  ^hcse  expenses  is  generally  known  and 
fixed  for  the  year,  and  are  to  be  divided  into  twelve  equal 
parts  and  charged  against  the  department  as  a  fixed  amount 
each  month.  In  determining  what  these  fixed  expenses  shall 
be  against  a  department  we  determined  among  other  things 


CHARLES  WARNER  COMPANY 
mmcKTt 

V>dA/  N?     26867 


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CHARLES  WARNER  COMPANY 


WAREHOUSE   OKDEB 

/A,/,    ^^     26867 

^  ^?rs^i^'■^ur^  <^<^        1 

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DESCRIPTION 

/ 

^3- 

Fig.  6.    "Pink  Slip"  or  Warehouse  Order. 


48 


the  number  of  square  feet  of  land,  or  the  number  of  square 
feet  of  space  in  a  building  occupied  by  each  one.  The  next 
item  for  consideration  is  the  asset  or  inventory  value  of  the 
buildings,  machinery  or  equipment  used  by  this  particular 
department. 

In  case  of  the  taxes  the  amount  was  distributed  in  pro- 
portion to  the  square  feet  of  ground  occupied,  and  also  on 
the  value  of  the  buildings. 

Insurance  is  figured  directly  on  the  buildings  themselves 
and  in  case  of  two  or  more  departments  occupying  one 
building  this  expense  is  prorated  in  proportion  to  the  number 
of  square  feet  occupied. 

Depreciation  is  figured  as  a  percentage  on  the  inventory 
value  of  the  buildings,  machinery  or  equipment,  while  in- 
terest on  Investment  is  taken  as  a  percentage  on  this  same 
asset  value. 

This  leaves  only  the  administrative  expense  to  be  pro- 
rated, and  this  is  distributed  the  same  as  the  general  ex- 
pense described  above,  namely  in  proportion  to  the  amount 
of  sales  in  each  department  or  as  may  be  determined  by 
experience. 

Taken  as  a  whole,  we  find  the  fixed  expense  as  shown  In 
our  sample  cost  card  under  account  G-2:i7  amounts  to  $153.90 
a  month  or  a  total  of  $1,846.80  a  year. 

The  material  costs  are  obtained  at  the  end  of  the  month 
from  the  summary  of  the  duplicate  pink  slips  In  connection 
with  the  average  prices  as  shown  by  the  perpetual  stock 
Inventory  card. 

The  addition  at  this  point  shows  the  total  cost  of  the 
material  together  with  the  labor  of  handling  it  and  Its  pro- 
portion of  general  expense  and  its  proportion  of  fixed  ex- 
pense, and  becomes  the  total  cost  at  the  yard  gate.  The 
quantity  or  tonnage  shown  is  also  obtained  from  the  dupli- 
cate pink  slips  and  is  transferred  to  the  cost  card  from  the 
daily  summary. 

Dividing  the  prime  cost  by  the  number  of  tons  sold,  we 
obtain  the  prime  cost  a  ton.  In  the  same  way  the  fixed  and 
material  cost  per  ton  is  obtained  and  the  cost  per  ton  at  the 
yard  gate.  In  fact,  each  one  of  the  expense  items  might 
be  divided  by  the  quantity  sold  In  order  to  obtain  the 
various  costs  per  unit.  Also  the  percentage  that  the  prime 
cost  bears  to  the  material  cost  etc.,  could  be  found. 

We  now  come  to  one  of  the  most  important  items  in  the 
entire  building  supply  business,  namely  the  tcamage.  At 
least  we  have  found  it  so. 

Teamage. 

The  teamage  charge  against  each  material  or  department 
Is  ascertained  in   the  following  manner  : 

We  have  what  are  known  as  teamage  sheets,  on  which  a 
careful  record  Is  kept  of  'the  time  teams  come  in  the  yard 
and  the  time  they  leave  the  yard,  and  also  the  material 
that  thpy  are  employed  in  teaming.  From  this  sheet  we  are 
able  to  total  up  the  number  of  horse  hours  employed  In  all 
departments    and    also    the    number    employed    in    each    par- 


ticular department.  The  total  monthly  expense  of  the  stable 
and  drivers  is  then  divided  by  the  total  number  of  horse 
hours  and  the  cost  per  horse  hour  obtained.  Teamage  ex- 
pense Is  then  distributed  against  the  different  commodities 
in  proportion  to  the  number  of  horse  hours,  and  thus  we 
have  a  very  accurate  distribution  of  this  expense.  ISxtra 
hauling  beyond  the  city  limits  is  charged  for,  and  when 
subtracted  from  our  total  teamage  cost  gives  us  our  net 
teamage. 

The  number  of  tons  teamed  is  generally  less  than  the 
number  of  tons  sold  for  the  simple  reason  that  a  few  cus- 
tomers do  their  own  teaming.  Dividing  this  net  cost  of 
teamage  by  the  tons  teamed,  we  have  the  teamage  cost  per 
ton  for  an  average  haul  of  two  miles. 

The    average    teamage    cost    per    ton,    shown    in    ITig.    8, 


CHARLES   WARMCR  COMWMm 


iMBa.  r.  1.   Oiibftll  k  OB.. 
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K     K00#     Bottca 


9.01 

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Fig.  7.    Monthly  Bill  and  Ledger  Account. 
49 


amounted  to  $0,464  for  the  year.  This  seems  to  bear  out 
the  general  proposition  that  the  teamage  costs  were  running 
about  $0.50  a  ton.  In  a  number  of  cases  this  was  true, 
but  we  found  upon  analysis  that  the  cost  in  one  of  our 
heaviest  tonnages  averaged  $0.99  a  ton  owing  to  peculiar 
conditions  due  to  the  material.  Specific  cases  such  as  this, 
will  be  taken  up  and  discussed  later. 

Selling  Expense. 

Before  we  can  arrive  at  the  total  delivered  cost  a  ton 
we  must  add  to  each  department  the  prorata  cost  of  our 
selling  expense.  These  percentages  are  determined  in  the 
same  way  that  the  general  expense  is  determined ;  namely,  in 
proportion  to  the  amount  of  gross  sales  In  each  department 
modified  by  the  judgment  of  the  men  most  closely  in  touch 
with  the  sales  conditions,  but  in  general  we  may  say  that 
the  selling  expense  Is  in  proportion  to  the  sales. 

Analysis  of  Sales. 

The  next  step  beyond  the  cost  records,  shown  in  Fig.  8, 
is  the  analysis  of  sales  reprodnced  in  Fig.  0.  This  record  is 
kept  on  a  card  and  first  shows  the  net  tonnage  each  month 
and  the  accumulative  tonnage  for  the  year  up  to  date.  Next 
comes  the  amount  of  sales,  from  which  is  subtracted  the 
material  costs.  This  leaves  us  the  gross  earnings,  against 
which  is  charged  the  operating  expenses  or  prime  costs  from 
the  cost  card.  Fig.  8.  This  leaves  us  the  gross  earnings  at 
the  yard  gate,  from  which  must  next  be  subtracted  the  de- 
livery expense,  which  includes  teamage  and  carrying.  This 
leaves  us  the  gross  earnings  delivered.  li'rom  this  amount 
is  taken  the  selling  expenses  already  determined,  and  finally, 
If  there  is  anything  left,  the  fixed  charges  are  subtracted, 
leaving  a  net  earning  or  loss  for  the  department  for  the 
month.  This  loss  or  gain  is  accumulated  month  by  month 
In  order  to  show  the  total  at  the  end  of  any  particular  period 
of  time. 

After  the  accumulated  earnings  or  loss  comes  various 
figures  showing  the  average  cost  a  ton  for  material,  operating, 
teaming,  selling,  fixed  charges  etc.  These  figures  are  based 
on  sales,  whereas  the  figures  shown  In  Fig.  8  are  based  on 
tons  teamed  and,  therefore,  do  not  exactly  agree. 

MoutMy  Loss  and  Gain  Statement. 

From  our  analysis  of  sales  card.  Fig.  9,  there  is  prepared 
monthly  loss  and  gain  statements  bringing  together  in  one 
place  all  the  vital  Inlurmatiou  in  regai*a  to  the  variou* 
materials.  These  are  shown  In  Figs.  10  and  11,  and  form  a 
summary  of  all  the  analysis  cards  for  use  by  the  executives 
of  the  company.  Certain  percentages  that  will  be  useful  in 
analyzing  the  business  are  determined  on  this  sheet.  Among 
these  are  the  percentage  that  the  handling,  teaming,  selling 
and  administrative  expense  bears  to  the  cost  of  the  material 
in  each  department,  and  the  percentage  of  net  profits  to 
gross   sales   in   each   department.     These   monthly   loss  and 


gain  statements  should  also  be  accumulated  so  that  at  the 
end  of  any  particular  month  a  comparison  could  be  made 
with  the  standing  of  the  business  as  compared  with  the  cor- 
responding number  of  months  of  the  previous  year. 

With  the  accumulated  monthly  loss  and  gain  statements 
the  system  is  complete  and  it  only  remains  to  analyze  the 
facts  and  figures  as  presented  and  draw  certain  conclusions. 
Finally,  necessary  action  should  be  taken  to  correct  these 
figures  should  Ihey  be  found  unsatisfactory.  And  by  unsatis- 
factory I  mean  should  it  by  any  chance  be  found  that  they 
were  not  returning  the  12  to  15  percent  net  profit  on  the 
gross  sales. 


Conclusions. 

No  .cost  system  is  worth  the  paper  it  is  recorded  on  if  it 
is  not  used.  Assuming  that  this  statement  is  correct  let  us 
point  out  the  conclusions  that  can  be  drawn  from  the  fore- 
going cost  system.  Not  only  can  be  drawn,  but  as  a  matter 
of  fact  have  been  drawn  in  the  last  two  years'  experience 
of  our  company. 

In  the  first  place,  these  records  are  compiled  in  such  a 
way  that  they  check  absolutely  with  the  controlling  accounts 
in  the  general  ledger  of  the  company,  and  this  Is  a  very 
important  point.     If  cost  records  do  not  check  with  the  gen- 


•)    WIUilKnTOH  RBTAIL  COSTS,   i910. 


A/c 

;an 

re« 

lUr 

Ajr 

Hay 

Jun 

Jul 

Aug 

8.P 

Oet 

Kc 

Sec 

TOTAL 

Repam  —  tt-ttcr 

£31 

£34 
B3& 

£36 

£37 
£38 

ei 

' 1 

1 

61 

HkterUl 

Power 

1  96 
4  73 
76  86 
62  96 

1   95 

Supptlei  k  Suxtdrles 
Labor 

11  BO 
188  74 
61  68 

4  73 
86  07 
44  15 

38  31 
49  88 

49  84 
88  74 

41   63 

46  99 

6   — 
61  71 
50  49 

38  98 
47  98 

885 
43  83 
47  43 

2  85 
26  11 
46  B9 

89  76 
47  88 

9  46 
42  36 
54  .17 

41  82 
637  48 
614  93 

PRMR  COST 
Tixei  B^^enscs 
Carrying  Bxpenaas 

SOS  a 

16i  90 

le  66 

e  848  S6  . 

104  98 

153  90 

11  16 

S  406  83 

87  87 
183  90 

16  eo 

1  S83  68 

101  98 

183  90 

9  84 

1  039  53 

88  8t 
153  90 

11  97 
1  397  98 

117  to           88  M 
153  90         183  90 

19  14           £8  10 
8  068  31   i 1  658  03 

93  81 

183  90 

1£  58 
676  06 

80  88 

183  90 

S3  83 

936  88 

78  —         106  98 
183  90         153  90 

£4  88    ]        33  84 
758  88    -1  37S  68 

148  80 

183  90 

38  85 

1  £04  36 

1  298  79 

1  848  80 

241   64 

If  049   83 

rCTAL  COST 
Ton*  •old 

3  ess  38 

996 

S678  tt 
884 

1  541  89 
437 

1  304  65 
434 

1  65«  67 
490 

£  368  65   ; 8  126  93 
753               664 

1  138  36 
344 

1  198  a 

331 

1  008  97    |l  669  40 
£61          ;      488 

1  539  61  ISl  436  86 
412        '     6450 

Prl&e  cost*  p*r  ton 

.S03 
3.033 

.ISS 
3.010 

.800 

3.ia6 

.838 

£.771 

.161 
.J.191 

.165;             .133              .878 
£.963           3.119           3.037 

.244 
3.369 

.298!             •" 
3.567           3.243 

.36 
3.37( 

.£01 
3.128 

Coat  at  yarl  gita 

3. £36 

3.1iS 

3.586 

3.00c 

3.07£ 

3.183           3.E8S:          3.309 

3.813 

3.865 

3.463 

3.731 

3.383 

Teamage 

£39 

610  86 

e98  44 

S06  07 

•5   — 

185  37 
•6.50 

136  63 

•13  43 

1 

395  7£  !      416  94 

•£0  20         "11  60 

146  37 
•3  - 

144  84 

•a  78 

100  38 
.•4   — 

£07  37 

•15  50 

291  32 

•16  75 

3  076  98 
•103  63 

net  teamaee 
Tons  teanwd 
Team  cost  per  ton 

610  86 
983 

.621 

»8  44 
848 
.36 

801  07 
436 

.461 

lie  87 
488 
.878 

1£3  80 
489 

.8i8 

375  58 
754 

.498 

406  44 
66£ 
.8U 

143  37 
348 
.419 

i 

138  09           98  36   !      191  87   1      875  67 1  2  973  38 
318                287          i      479          |      407        i     6400 

.4271              .374-              .40   1                77 1                 46 

.1 i        ..         1                  j _ 

Retail  Sailing  txf     IQ  i 

Tona  sold 

Seiling  co»t  per  ton 



8»t 

81  3« 
996 

.061 

47  48 

884 

.056 

84  68 

4.i7 

.148 

88  80 
434 

.188 

96  96 
490 
.198 

60  97 
755 

.067 

46  16 

654 

.071 

1          !          1          1          ; 

,    69  9£           48  79   1        89  98  !        59  77           76  £S          746  88 

344          j      331                261          '      462               418             6460 
1 
.261j             .147              .arai             .124                188              .1)6 

TOTAL  rSLIVKRltC  COST  PIR  TOH 

1 

3.908 

3.537 

4.136 

3,41£ 

3.621 

3.688 

3.936 

3.969           4.18'           4.486,          3.987           4.59^            3.901 

*  Uirjit  4uantltlti, 

Fig.  8.    Departmental  Cost  Sheet. 


eral  books  they  are  unreliable  and,  therefore,  worse  than 
useless  from  the  fact  that  they  are  misleading. 

By  proper  use  of  the  "Pink  Slips,"  which  form  the  author- 
ity for  removing  material  from  the  yards  or  warehouses,  and 
the  customer's  charge  sheets,  a  daily  check  is  obtained  that 
shows  us  that  every  ton  of  material  taken  from  the  yards 
is  charged  to  somebody.  This  is  often  a  weak  point  in  the 
system  of  any  business  and  should  be  guarded  against  very 
carefully. 

The  maintenance  of  a  perpetual  inventory  proves  very 
useful  in  a  great  many  cases.  In  case  of  a  flre  it  is  undls- 
putable  evidence  to  the  insurance  companies  of  the  value  of 
the  stock  on  hand  and  it  has  been  so  proven  many  times  in 
the  courts.  An  accurate  record  of  stock  withdrawals  over  a 
period  of  six  months  or  a  year  shows  us  exactly  the  amount 
of  stock  we  ought  to  carry.  This  often  saves  thousands  of 
dollars  of  investment  in  over-stocking.  The  perpetual  inven- 
tory card  gives  us  a  correct  average  price  when  the  price  of 
purchased  materials  may  be  fluctuating.  And  finally  the 
balance  available  enables  us  to  tell  instantly  whether  or  not 
we  have  certain  material  in  stock  and  In  what  quantity.  On 
the  whole,  the  perpetual  inventory  Is  a  most  useful  and 
profitable  thing  to  have. 

Coming  to  the  summary  of  our  cost  cards,  a  monthly 
analysis  shows  whether  or  not  we  are  running  ahead  or 
behind  of  the  previous  month,  while  the  accumulated  costs 
show  how  we  stand  with  respect  to  the  same  period  of  time 
for  the  year  previous.  Very  often  when  these  figures  are 
called  to  the  attention  of  the  superintendent  or  foreman 
and  a  frank  talk  had  with  him  on  the  subject  it  is  incentive 
enough  for  him  to  do  better  the  next  month.  If  the  cost 
continued  to  run  high,  we  must  then  consider  ways  and 
means  of  changing  our  methods  of  handling  or  of  introducing 
labor  saving  machinery  where  it  is  possible.  This  cost  record 
will  enable  us  to  figure  very  accurately  whether  or  not  the 
investment  in  labor  saving  machinery  will  be  warranted. 

Labor  costs  per  unit  give  us  figures  to  go  by  and  enable 
us  in  a  number  of  ways  to  set  piece  rates  or  let  out  certain 
work  on  contracts.  We  have  found  this  to  work  particularly 
well  in  the  unloading  of  barges  of  sand  or  barges  of  bricks. 
It  is  possible  to  make  a  scientific  time  study  of  such  an 
operation  as  unloading  bricks  from  barges  and  many  other 
operations,  which  at  first  glance  seem  illy  adapted  to  putting 
on  piece  work.  Where  piece  work  rates  are  set  it  is  of 
greatest  importance  that  the  confidence  of  the  men  be  ob- 
tained. This  is  brought  about  in  some  cases  by  written 
assurance  that  a  piece  work  rate  once  set  will  not  be  changed 
for  a  year.  When  such  a  statement  is  made,  however,  the 
management  must  be  very  certain  that  they  have  made  a 
scientific  time  study  of  the  operation  and  that  their  labor 
cost  will  be  well  within  the  average  price  as  shown  by  the 
cost  cards. 

In  drawing  conclusions  and  showing  the  "results  to  be  de- 
rived from  a  properly  designed  cost  system,  I  might  give  an 
example  of   a  reduction   in   stable   costs   that   was   effected 


50 


KritlT  LOSS  1 

uii  ■tiTiiBrr. 

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Fig.  10.  Monthly  Loss  4"  Gain  Statements.  The  first 
shows  losses  which  were  overcome  by  the  cost  system 
when  the  second  was  taken,  several  months  later. 

through  these  records.  •  We  have  uniform  cost  records  In 
operation  in  seven  different  stables.  It  was  noticed  by  the 
management  and  drawn  to  the  attention  of  the  superin- 
tendent that  his  cost  of  feed  and  bedding  per  horse  per 
month  averaged  about  $5  more  than  any  of  the  six  other 
stables.  The  fact  that  the  six  were  very  nearly  the  same 
showed  that  their  average  price  could  be  taken  as  standard. 
Upon  Investigation  It  was  found  that  the  stable  boss  was  a 
grafter,  selllug  oats  outside,  Improperly  feeding  the  horses 
and  generally  an  "undesirable  citizen."  Upon  his  being  re- 
moved and  the  superintendent  giving  his  personal  attention 
to  the  matter  of  feeding  horses  and  regulating  the  amount 
of  feed,  tlie  cost  came  down  to  the  same  average  as  the 
other  stables  and  has  so  continued  tor  four  months.  At  this 
rate  we  will  effect  a  saving  of  $5  per  horse  on  fifty  horses, 
which  amount  to  $250  a  month  or  $3,000  a  year.  This  Is 
only  one  example  of  many  similar  eases.  Without  a  cost 
system  the  business  might  have  been  conducted  for  years  on 
this  basis  and  no  one  been  the  wiser. 

One  of  the   most  far  reaching  and  beneficial  effects  from 


a  record  of  the  prime  cost  per  ton  of  handling  material  has 
been  the  installation  of  a  bonus  system  for  the  superin- 
tendent and  foremen.  After  several  months  records  were 
complied.  It  was  found  that  the  prime  costs  a  ton  of  material 
in  different  departments  were  running  at  a  fairly  uniform 
rate,  showing  that  the  superintendent  and  foremen  had  ap- 
parently struck  their  gait.  Under  the  old  system  this  was 
considered  good  enough.  But  under  the  new  order  of  things 
we  held  a  meeting  of  the  superintendent  and  foremen  and 
in  fact  included  In  the  plan  the  clerks  In  the  otSce,  and 
made  them  a  proposition  which  practically  put  them  In  busi- 
ness for  themselves.  The  proposition  was  this :  If  these  men 
by  Increased  effort  on  their  part  could  reduce  these  costs  the 
company  would  give  them  as  a  bonus  50  percent  of  all  that 
they  saved.  This  amount  was  to  be  divided  among  the  men 
prorata  in  proportion  to  the  Importance  of  their  positions 
as  indicated  by  their  salaries.  If  any  of  you  gentlemen  have 
any  question  In  your  mind  as  to  the  amount  of  reserved 
energy  a  gang  of  foremen  have  in  getting  work  out  of  their 
oien  1  wouia  recommend  that  you  try  this  piuu. 

The   subject   of   teamagc   costs   Is   a   most   Important   one. 
Too  often  the  assumption  is  made  that  the  teamage  cost  a 


ton,  say  for  an  average  haul  of  two  miles,  is  $0.50  or  what- 
ever figure  may  be  calculated  from  a  year's  records.  Whilfc 
this  may  be  perfectly  true  for  certain  materials,  there  are 
always  one  or  two  materials  which,  owing  to  peculiar  con- 
ditions, may  be  far  above  this.  As  a  matter  of  fact,  our 
actual  cost  records  showed  on  one  of  our  important  tonnages 
that  the  cost  a  ton  for  teamage  averaged  exactly  $0.99, 
whereas  the  selling  price  had  been  fixed  on  the  assumption 
that  the  cost  was  $0.50. 

The  material  in  question  was  machine  mixed  wet  mortar. 
This  was  manufactured  in  a  separate  building  of  its  own 
with  comparatively  expensive  machinery  and  hauled  to  the 
jobs  In  steel  mortar  boxes.  The  excessive  haulage  costs 
arose  from  the  fact  that  after  the  box  mortar  had  been 
used.  It  was  up  to  us  to  send  a  team  out  and  bring  back 
the  empty  box,  thereby  practically  doubling  our  teamage  cost 
a  ton. 

Acting  on  the  cost  figures  as  shown  by  our  records,  ways 
and  means  were  devised  to  replace  the  wet  mortar  by  a  dry 
mortar  put  up  In  bags,  which  could  be  teamed  at  a  normal 
cost.  Not  only  does  this  dry  mortar  effect  a  saving  in  team- 
age,  but  it  is  In  Itself  a  superior  article  and  Its  introduction 


•iimnTrwi  i>r,'Aii  tadd.      warua  or  sun,  mo 


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Iter 

Jun 

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Oct 

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Aois.ep 

2898.87 

434 

8796.97 

490 
3819.97 

756 
3971.97 

954 
4985.97 

34', 
4969.97 

331 
6300.67 

891 
5561.97 

498 
9043.97 

411.77 
6455.64 

6499.64 

»••.   «a.ouii'.  of  SilPi 

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«96  55 

ewp  ee 

1595  31 
9095  19 

1547  i3 
9918  58 

1796  69 
11379  81 

8602  49 
13990  70 

8903  14 
16843  94 

1825  95 
17469  79 

1199  30 
16969  09 

1023  67 
19691  76 

1779  07 
81496  63 

1596  56 
2.'^053  39 

83053  39 

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taw  H 

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1039  53 

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8099  il 

1959  03 

979  09 

939  89 

768  88 

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5(J7  60 

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534  le 

405  11 

347  99 

860  05 

871  46 

399  39 

302  80 

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104  n 

97  57 

101  99 

99  98 

117  80 

99  90 

93  91 

60  65 

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146  50 

1296  79 

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879  99 

419  99 

319  21 

294  09 

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414  96 

445  04 

199  99 

166  07 

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324  17 

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19  09 

871   81 

130  89 

8  18 

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95  13 

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58  80 

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416  35 

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99  99 

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49  19 

99  98 

46  75 

59  98 

69  77 

79  89 

746  98 

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819  91 

»  33 

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•178  99 

5  81 

•3T  60 

9  33 

•7  97 

•196  78 

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'  Ulnua  quar.tltlaa  7r  loaaaa. 


Fig.  9.    Analysis  of  Sales. 


51 


Is  simply  a  matter  of  educating  the  trade.  And  in  this  cam- 
paign of  education  we  tell  our  customer  very  frankly  that  it 
is  a  mattfer  of  costs  with  us,  and  we  have  found  very  few 
of  them  but  what  are  fair  minded  enough  to  see  the  force 
of  our  arguments. 

Our  analysis  of  sales  records  enable  us  to  determine  very 
accurately  what  our  selling  prices  should  be.  But  if  for  any 
reason  selling  prices  are  governed  by  cond'tions  beyond  our 
control,  we  know  what  our  losses  are  in  hiindling  that  par- 
ticular material.  It  Is  then  up  to  us  to  br'ng  about  certain 
trade  agreements  with  other  dealers  or  if  we  are  unable  to 
do  this,  to  dificourage  the  sale  of  that  particular  commodity. 

Without  a  monthly  loss  and  gain  statem'^nt,  as  shown  in 
Fig.  10,  we  would  simply  know  that  in  the  particular  month 
for  which  this  statement  was  made  the  entire  department 
had  lost  $27.38  or  a  little  over  one-tenth  of  1  percent  on 
the  gross  sales.  A  condition  very  much  different  from  the 
12  to  15  percent  that  we  decided  in  the  first  part  of  this 
paper  was  to  be  reasonably  expected  from  tb  5  business.  What 
department  or  material  had  contributed  to  t  his  loss  we  could 
not  tell.  But  with  this  statement  it  was  very  easy  to  see 
the  departments  2,  6,  9  and  10  had  been  the  principal  con- 
trlbuters  to  it  Department  T  had  also  helped,  and  depart- 
ment  4,   In   which   we  had   next   to   the   highest   sales,    had 


contributed  but  1%  percent  of  those  sa'es  to  the  profit 
column. 

Certain  departments  in  which  the  tonnage  and  gross  sales 
were  very  heavy  and  which  we  natural!  y  concluded  were 
profitable  departments,  gave  us  a  great  nhock  by  showing 
that  they  were  decidedly  unprofitable  anc  that,  apparently, 
the  more  business  we  did  the  more  money  we  lost. 

The  Improved  conditions,  as  shown  in  'he  monthly  state- 
ment, reproduced  in  Fig.  11,  did  not  com-^  about  the  month 
following  the  statement  shown  in  Fig.  10,  by  any  manner 
o(  means  nor  in  six  months  for  that  ma  iter.  It  was  only 
after  many  months  of  concentrated  thovght  and  effort  on 
the  part  of  the  management,  of  the"  sale's  force  and  of  the 
engineers  that  these  improved  conditions  were  brought  about. 
The  facts  were  brought  to  our  attention  a^d  it  was  up  to  the 
management  to  make  their  decisions  and  take  the  necessary 
action.  It  was  readily  seen  that  dept  rtment  No.  1  was 
profitable,  returning  us  13.74  percent  on  our  sales.  Sales 
effort  was  increased,  the  operating  was  put  on  a  piece  work 
basis  and  this,  together  with  the  help  o<  the  general  bonus 
plan  to  the  superintendent  and  all  toreinen,  brought  about 
decreased  costs  of  handling  and  teaming  with  the  result  that 
the  net  profit  was  Increased  to  30  percent. 

The  sales  in  department  No.  2  were  rliscouraged  with  the 


result  that  instead  of  a  loss  of  14.43  percent,  we  had  a  loss 
of  only  9.1  percent. 

Department  No.  3  was  a  profltabU-  department  and  in- 
creased sales  effort  and  decreased  operftting  expense  brought 
about  an  increase  of  over  6  percent  in  the  net  profit  of  the 
department. 

In  the  same  way  we  might  go  on  and  analyze  all  ten  of 
the  departments.  Referring  to  the  total  figures  we  find  that 
the  business  as  a  whole  made  a  net  profit  of  $2,298.07  or 
8.06  percent  on  the  sales  which  had  been  increased  only 
slightly  over  the  amount  of  sales  in  the  previous  statement. 

Even  though  the  installation  of  these  methods  has  cost 
us  a  great  deal  of  time  and  money,  nevertheless  I  will  leave 
it  to  any  fair  minded  business  man  if  the  results  are  not 
justifiable,  and  I  can  not  urge  upon  you  too  strongly  the 
necessity  of  every  man  in  the  building  supply  business  today 
to  "go  and  do  liljewise." 

[The  above  paper  was  delivered  before  the  National 
Builders'  Supply  Association,  and  also  distributed  in 
pamphlet  form.  Where  the  author  says  "department" 
tlie  term  "branch  yard"  or  "line  yard"  would  be  u.scd 
in  the  lumber  business;  he  does  not  mean  separate  mer- 
chandise departments  of  a  given  yard. — Editors.] 


« 


How  to  Meet  Mail  Order  Competition." 


The  articles  on  this  subject,  which  appeared  in  the  AMERICAN  LUMBERMAN  in  1912,  are  now 
available  in  booklet  form  at  twenty-five  cents  a  copy,  postpaid. 

The  subject  is  such  an  important  one  to  the  retail  dealer  that  we  felt  there,  were  many  who  would 
like  to  have  these  articles  in  convenient  and  permanent  form,  so  that  everyone  could  be  supplied,  espe- 
cially as  back  issues  of  the  AMERICAN   LUMBERMAN  were  not  to  be  had. 

The  letters  on  "Collections  by  Retail  Lumber  Dealers,"  that  were  reprinted  in  the  AMERICAN 
LUMBERMAN  in  1910,  are  still  available  at  fifteen  cents  a  copy..  These  letters  by  AMERICAN 
LUMBERMAN  subscribers  give  the  experiences  and  suggestions  of  prominent  retailers  and  offer  many 
exeellent  ideas  on  the  handling  of  accounts.     It  will  well  repay  any  dealer  to  carefully  read  them. 


52 


Free  Advertising  Service  for  American 

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(Nam*  and  Addrttt) 


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service  if  you  are  interested. 

431   South    Dearborn    Street,    CHICAGO,   ILL. 

53 


BOOKS  FOR  LUMBERMEN. 


American  Iiumberman  Telecode 

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trade  ;  412  pages ;  61,427  code  words ;  nearly  4,000  In 
use.     $5,  postpaid. 

Ijiunber  Shed  Construction 

Met  L.  Saley's  new  book  on  construction  of  lumber 
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Bealm  of  the  Retailer 

The  best  of  Met  L.  Saley's  writings  put  into  perma- 
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Shows  the  cost  of  any  number  of  feet  of  lumber  be- 
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The  American  Lumberman's  Curiosity  Shop 

A  reference  work  containing  hundreds  of  practical  ques- 
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In  Forest  Land 

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The  Coalier's  Actuary 

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Collections  by  Retail  Lumber  Dealers 

A  series  of  letters  by  subscribers  to  the  American 
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Climax  Tally  Book 

For  hardwood  lumbermen,  110  pages,  size  closed  4V,.  i 
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Seventy-two  pages  of  tables,  showing  the  contents  of 
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The  Cost  of  Growing  Timber 

By    R.    S.    Kellogg   and    E.   A. 
exposition  of  facts  and  figures. 

Craftsman  Homes 

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.54 


* 1 s-*i* 

T,IMBER  SHED 
CONSTRUCTION 

MET  L.  SA LEY'S  LATEST  BOOK 

Covers  every  phase  of  shed 
construction  and  other  build^ 
ings  used  in  connection  with 
a   retail   lumber  yard,  with 
plans   and    specifications 

SOME  OF  THE  FOLLOWING  SUBJECTS  TAKEN  INTO  CONSIDERATION 
GIVE  AN  EXCELLENT  IDEA  OF  THE  COMPLETENESS  OF  THE  BOOK 

Type  of  Sheds                                                              The  Unloading  Deck 
Location                                                                                         Po'e  Support 
The  Foundation                                                                                 The   Roof 
Ventilation                                                                                   The  Platform 
The  Alley                                                                                     Width  of  Bin 
The  Hood                                                                            The  Warm   Room 
Capacity  of  Shed                                                                 The  Store   Room 
Open  Dustproof  Room                                                    Advertising  Space 
To  Exclude  Animals  and  Birds                                            Molding  Racks 
Displaying  Goods                                                                 Storing  Timbers 
The  Office                                                                  Sheds  for  End  Storage 
How  to  Build   a  Lime  House               Origin  and  Advantage  of  Sheds 
When  to  Build  the  Enclosed   Shed 

Lumbermen  have   wanted    •uch  a  book   (or  years— it    ia  now  ready.     If  you  are  not  aurc  you  want  a  copy, 
let  us  send  you  one  postpaid  for  examination,  witti  the  privilege  of  returning  if  you  do  not  wish  to  retain 
it.     "Lumber  Shed   Construction"   haa  176  pages  printed  on  a  high   grade   sepia  paper,   durably  bound 
in  Russian  linen.     Sent  postpaid   anywhere   in  the  United  Statea.  Canada  or  Mexico   for  St. 50  a  copy. 

ss 


INDEX. 

Anthony,  M.  P 26 

Bank  Statement 28 

Cash  Forms 15,  27,  29,  35,  39 

Credit  Memos 21,  23 

Clarke,  Archie  V 33 

Cost  Sheet 50 

Counter  Book 38 

Delivery  Forms  (see  also  Sales  Forms) 26 

Estimate  Systems 7,  8,  19 

Grube,  A.  K 18 

HawUeye  Lumber  and  Coal  Co 40 

Hazen,  Wirt  M 34 

Hendrickson,  O.  M .  29 

Hopkins,  Clarence  E., 32 

Hunt,  James  B 15 

Inventory  Card 47 

Iverson,  I.  G 23 

Jordan,  William 45 

Journal  Forms 6,  12,  16,  22,  25 

Ledger  Forms 31,  39,  49 

Lesher,  E.  J 6 

Monthly  Statements 4,  15,  33,  51 

Note  Registers ; 21,  28 

Patricks,  William 4 

Purchase  Forms 5,  18,  26,  42,  46 

Remittance  Forms 26,  29 

Requisition    Forms 45 

Sales  Forms  and  Records 4,  5,  7,  14,  20,  24,  27,  29,  32,  37,  38,  41 

Shaw,  S 37 

Shop   Orders 40,  43 

Stock  Sheet  Forms. . .- 5,  9,  10,  17,  19,  21,  2l>,  26,  33,  39,  41,  42 

Telephone  Slip 40 

Tessman,  Gus  H 11 

Time  Sheet 48 

Trial  Balance  Forms 28,  36 

Voucher  Forms  and  Records 8,  9,  10 

Warehouse  Order 48 

Yard  Orders  (see  also  Sales  Forms) 38 


W 


'^^ 


^^  8  1955 


LD2I-10Om-7,.39(402s) 


_U  tv^'-' 


^^^^ 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 


.    J 


I 


